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Founded in 1999, Ctrip has experienced substantial growth and become the leading travel service provider in China. It enables consumers to make informed and cost-effective hotel and flight bookings by aggregating hotel and flight information. In the November edition of Fortune China magazine, Ctrip was named one of “Best Employers of 2007.”

Yesterday, both James Liang, the Chairman of the Board and co-founder of Ctrip.com, and Jane Jie Sun, Chief Financial Officer of Ctrip.com, came to Silicon Valley, giving us a great presentation of ctrip’s success. Orrick at Menlo Park is the venue.

As I have noticed when I was in China recently, the travel industry there will have a very good growth because of the firm demands from both domestic and overseas. The business is very good enough at non-holiday seasons. As China’s revolutionary travel consolidator and the biggest online travel site, Ctrip provides travel services to more than 15 million members. The upside potential is tremendous considering the total population in China, not to mention both Olympic this year and World Expo in 2010. The ctrip.com is very easy to use. The search is fast. There is virtual hotel tour, bundled with map. The only tiny hurdle that I can see is that membership requires a local cell phone number, which prevents foreigners from booking their travels when they haven’t visited China before.

During the presentation, James and Jane showed us how they run ctrip. Ctrip has robust and smooth workflows for both online and off-line booking and custom support. It is a click and brick business model. Ctrip people try to manage business in a very scientific way. They are utilizing 6 Sigma. Ctrip philosophy is around customer, teamwork, respect, integrity, and partner. All these are not that surprising, given both James and Jane’s background. No wonder ctrip can become that successful.

After the event, I add two stocks into my must-own list: ctrp and hmin. Well, it is a no-brainer for me.

Media Coverage:

• Ctrip: The Chinese Are Coming — SeekingAlpha.com
• B11 Mingpao, January 26, 2008 (Chinese)
• World Journal, January 26, 2008 (Chinese)

For a decade, this name, Min Zhu, has been associated with the very success of WebEx, a leading Internet conferencing platform company. Under his tenure, the company left those heavyweights, such as Microsoft, IBM, and Cisco in the dust. WebEx created even more buzz early this year while Cisco acquired the company for $3.2 billion, the second largest deal for Cisco in the past 5 years. Two years ago, Min left US to ride the economic waves happening in China. He founded Cybernaut Venture Capital Management, an incubator VC firm. He is also venture partner of New Enterprise Associates, one of the prestigious US VC firms.

In Oct. 6, he returned to Silicon Valley to share his China story. His speech, full of wits and inspirations, led to laughs and applauses from the audience. As his retirement plan, Min wants to contribute to China growing economy. With over 20-year experiences in high-tech industry, Min was lost at beginning. Due to the fact that China doesn’t have a credit system, many times, people didn’t treat him seriously simply because either his car is not good enough or he doesn’t have a designated driver. After two years, however, he touched the pulse of China’s economy like no other.

Min believes in service sector. More specifically, he singled out the top 5 areas

1. Financial service, including banks and insurance companies
2. Health care service
3. Education for college entrance exam, and Chinese learning
4. E-commerce
5. Media

I concur with two examples. Insurance is definitely hot. China Life Insurance (LFC) has a whopping 100% return if people jumped in later June. Similarly, the leading English education company in China, New Oriental Education & Technology Group (EDU), generates another 100% return since late January.

As an investor, Min is interested in companies having online-offline business models, resided in a market with size around 100 billion RMB and without any dominant player. The company must have a good team. He favors low-tech companies with high-tech flavor. He noticed that the typical time-to-IPO is a very short 3 year average, which is very ideal for investors. VC industry is also booming in China with Zhejiang Province alone having more than a hundred local investment funds. When talking about China bubble with average PE of SSE around 50, Min likes the economy to have some sort of bubble. He notices that the whole US IT industry has improved tremendously after previous Internet bubble in 2000. Without that bubble, the industry wouldn’t have made so much progress and without bubble bust, the industry wouldn’t mature dramatically, leading to a more solid booming beyond the industry itself. The recent boom is led by NYSE with P/E ratio of Dow Jones Industrial average still around 17.

As a philanthropist, Min donated $10 million to his alma mater, Zhejiang University, setting up Zhejiang University Innovation Institute, International. He has a lofty mission to drive innovations that affect common people’s every day life. One good area is green-tech. He believes that solar panel cost will be driven down by Chinese manufacturing industry to be compatible with oil and coal within 2 years.

Finally, Min shared his keys to the success during the Q&A section:

1. Optimistic
2. Persistent
3. Grateful
4. Team spirit

And don’t forget B2G (Business-to-Government), if one wants to do good business in China.

There are a lot more in this 3-hour event. I cannot list every good point mentioned by Min. One thing is sure by Min that there will be a lot more opportunities coming out in the next 5-10 years. These who surf well in the China wave could definitely accumulate a lot of fortune. Though, it is equally important to succeed for a good cause, like what Min has done.

In the past Saturday (July 21st), HYSTA Distinguished Speaker Series had another excellent event: panel discussion on Web 3.0. The moderator was Qi Lu, Executive Vice President of Engineering Search and Search Marketing at Yahoo, who was wearing a t-shirt from FOO Camp. Panelists included: Jack Xu, Vice President of Engineering & Research and Technical Fellow of eBay, previously served as CTO at Netease and director of core technology at Excite; Li Gong, Chairman and CEO of Mozilla Online Limited, previously served as Managing Director of MSN Technologies; Bill Li, joined Mayfield and GSR recently, previously in charge of Google Mobile. Having such a strong panel, one could guarantee that the whole discussion was in-depth, thought-provoking and informative.

Web 2.0 is a phrase coined by O’Reilly Media in 2003 and popularized by the first Web 2.0 conference in 2004. It refers to a new generation of Internet full of social-networking sites, wikis and folksonomies. Given the successes of 2.0 from companies like YouTube, MySpace, and Facebook, it is understandable that people want to jump ahead of the game, catching the next wave, even by speculation. There is an interesting diagram worth noticing, called 2007 Web Trend, which includes Web 2.5 applications.

Fortunately, our seasoned speakers shed lights on the 3.0 myth.

• Internet was created to connect people together, which has been carried on as the fundamental base from Web 1.0, 2.0, to 3.0.
• Internet connectivity is important. Watch out for technology advances, better availability, and policy improvements. For example, 2.0’s success is partially based on broadband network.
• Web standards are important. More importantly, who will drive the adoption of standards? Obviously, open source society will play a major role.
• Web technology will further expand into everyday life, which will largely change social behaviors of human society. Apple iPhone could be a good start.
• Browsers and browser like applications will prevail with enhanced security capabilities as they control both content delivery and application delivery.
• New business models and new ecosystems will be created for 3.0, just as Google Adsense and virtual currency from online gaming and virtual worlds for 2.0.
• Web 3.0 is still in its infancy. The judgment call will be made by Internet users. As a good example, there are 400 copycats of YouTube in China. Only the ones that satisfy the end users the best will eventually survive and prosper.