The Chinese P2P video vendor Synacast, better known under the name of its video platform PPLive, will announce next week the appointment of former Microsoft (s MSFT) exec Vincent Tao as its new CEO. Tao joined Microsoft in 2005 via the acquisition of his mapping startup Geotango, which provided the technology for Virtual Earth. Since then, Tao has acted as senior director for Microsoft’s online services division.
PPLive is one of the largest P2P video-streaming platforms in China, with some 20-30 million active monthly users. Tao relocated from Seattle to Shangai, where PPLive is based, just a few days ago, and he told me on the phone that he’s excited about the Chinese market. “The opportunity there is unprecedented,” he explained.
Geotango, which Tao founded in 2002, and its web-based 3D mapping product GlobeView became an overnight acquisition target when Google (s goog) launched Google Earth in the summer of 2005. One of the companies that kept calling Tao was Microsoft, as Bill Gates was very interested in launching a Google Earth competitor. “He was hands-on involved” in the eventual acquisition, recalled Tao, and viewed it as a key strategic investment. That attention continued when Tao started to work for Microsoft, where he quickly became one of the highest-ranking executives of Chinese descent. “Bill was very nice to me,” he said.
So why leave all that for an online video venture that few in the U.S. even know by name? Tao got interested in the Chinese market while working on Microsoft’s local search strategy there in 2008; he got in touch with PPLive through one of its investors earlier this year. “After talking to them, I sort of fell in love with them,” Tao told me, explaining that he sees huge potential for video advertising and a lot of room for PPLive to grow.
PPLive had been actively looking at an expansion into the U.S. through partnerships, but those plans hit a snag when the market slowed down towards the end of 2008. The company had to let go of more than 10 percent of its workforce in October, including its sole U.S.-based employee. However, things are apparently looking up. A spokesperson for PPLive told me it’s working with some companies outside of China on P2P-powered online video platforms, but declined to provide any details because those platforms haven’t launched yet.
Tao thinks those kinds of alliances are essential for PPLive’s future international growth. “(We) will need to align with major content providers, especially international content providers,” he told me. Of course, PPLive isn’t the first P2P video platform to try to establish itself in the U.S. and European markets. Joost and Babelgum made similar attempts, but failed to get any traction with consumers and eventually abandoned P2P for Flash-based streaming web sites.
The situation is completely different in China, where PPLive achieved an install base of 110 million clients. Part of this success is based on the local market conditions. Bandwidth is expensive in China, the infrastructure for content providers is mediocre at best, and 91 percent of the country’s 298 million Internet users have a broadband connection. P2P is not one of many choices in China, Tao explained; it’s the only way to deliver online video on such a massive scale.
However, Tao believes that P2P will eventually become an essential part of online video in Western markets as well. “Bandwidth (in the U.S.) will be a challenge once HD is coming,” he told me, noting that web sites like CNN.com already use P2P to facilitate live streaming.
PPLive clearly wants to be part of this trend towards P2P CDNs, and it claimed its stake when it launched an experimental plug-in to accelerate videos on YouTube and other Flash sites via P2P last year. Tao believes that big video platforms will eventually embrace such solutions to cope with the exploding demand for video bandwidth. “You gotta reroute your traffic and diversify your traffic when your freeways are crowded,” he said.