Changing of the Guard: China Pressures Businesses to Help Censor Web

Starting earlier this year, Web police units directed the companies, which included joint ventures involving American corporations, to buy and install hardware to log the traffic of hundreds or thousands of computers, block selected Web sites, and connect with local police servers, according to industry executives and official directives obtained by The New York Times. Companies faced the threat of fines and suspended Internet service if they did not comply by prescribed deadlines.

The initiative was one in a range of shadowy tactics authorities deployed in the months leading up to the 18th Party Congress, which is scheduled to end on Wednesday, in an escalating campaign against information deemed threatening to party rule. The effort, while spottily executed, was alarming enough to spur one foreign industry association to lodge a complaint with the government. Several foreign companies quietly resisted the orders, which posed risks to communications and trade secrets that they take pains to secure.

The events surrounding the party congress magnify the constant challenge facing China’s Internet security apparatus, which is to maintain the party’s lock on political power without choking off a wired China from the global economy.

The more intrusive recent measures appear aimed at plugging some of the gaps in China’s nexus of surveillance and censorship, sometimes termed the “great firewall.”

“It goes this way pretty much every time there’s some big political event in Beijing: the DVDs are gone, the prostitutes are gone, and the Internet’s slower,” said David van Meerendonk, an American who operates an information technology company here. “They’re struggling to find a balancing point.”

Over the past couple of weeks, partial blocking has crippled access to Google and other sites, at times completely. It has also disrupted programs that many people here use to circumvent surveillance and reach blocked overseas sites by other means. Some Internet providers have cut service for hours, citing “maintenance.” Democracy activists and foreign journalists have reported increased attacks on their e-mail accounts.

On domestic social networks, already vigorously policed, censors have fine-tuned their craft. Sina Weibo, the nation’s most popular microblogging site, has experimented with “semi-censorship,”as one blog termed it, filtering search results for once-unsearchable terms. One semi-censored term was the Chinese shorthand for the party congress itself: shiba da. Blocking it had prompted some of China’s more playful microbloggers to resort to a similar-sounding English substitute: “Sparta.”

Hu Jintao, China’s departing leader, in his report on the opening day of the congress last Thursday, gave no sign of any relaxation in controls. “We should strengthen social management of the Internet and promote standardized and orderly network operation,” he said.

The police and other agencies rely on legions of local censors, automated filtering and strict regulation of Internet service providers.

GreatFire.org, a Chinese-based blog that tracks government filtering, found in tests this month that Google e-mail was being partly blocked, and that blocking intensified after the congress began. One possible explanation for the strategy was that “authorities are nervous of fully blocking Gmail,” it said. “The government may be scared of a backlash from the urban, educated and young people who tend to use Gmail, not to mention the businesses that rely on it.”

In late summer, the police stepped up jamming on circumvention software, according to two party insiders with Chinese security ties. Students who use Freegate, free software backed by the banned spiritual movement Falun Gong, said that as early as August they experienced unusually frequent disruptions.

China says its online security policies are needed to fight pervasive fraud, cyberattacks, pornography and rumormongering.

Adam Century contributed reporting.

Zillow and Other Companies Moving From Consumers to Businesses

In the last 18 months, though, Zillow has lavished its attention on a different audience: real estate agents. It has created one service that lets them build their own Web sites, one for broadcasting their property listings and another for managing communications with home seekers.

There used to be a clearer line between Internet companies that catered to consumers and those that served businesses. The market was neatly divided between the unglamorous business-to-business or B2B companies, operating mostly out of public view, and the flashier business-to-consumer or B2C companies. But with Zillow and a wave of similar firms, that distinction is fading.

LinkedIn, Groupon and GrubHub — consumer services that help people advertise their talents, find daily deals and order takeout food — are among the companies seeking to burrow more deeply into the operations of businesses in their respective markets. Some companies, like Zillow, are shifting toward business clients well after they were begun. For others, it has been part of the plan from the beginning.

Of course, most consumer Internet companies have long had relationships of some kind with other businesses. Amazon.com works with thousands of manufacturers and with sellers who use its site as a storefront. EBay, initially known as a marketplace for individuals to peddle collectibles and other goods, now has plenty of businesses that sell on its site. Then there are the businesses to which Facebook, Google and Yahoo sell advertising.

But consumer Internet companies of the newer generation are doing even more. In many cases, the tools they are providing businesses resemble specialized versions of so-called customer relationship management services from companies like Salesforce.com, which help businesses increase sales and keep track of communications with clients.

By moving in this direction, consumer Internet companies hope to tap potentially rich new sources of revenue, which could make them more attractive to investors. A company that gets business clients to depend on a broad set of its services can make it tougher for competitors to swipe its customers.

“You can’t just sell advertising without being exposed to someone else undercutting you on price,” said Spencer Rascoff, chief executive of Zillow. “If you sell ads plus services, you’re in a more defensible position.”

Bill Gurley, a Zillow board member and venture capitalist, has seen enough hybrid Internet companies that serve both businesses and consumers that he coined a term to describe them: B2B2C. “We’re moving from a day and age where you’re just a Web site to one where we’re automating the connections between businesses and consumers,” he said.

Mr. Gurley’s firm, Benchmark Capital, has invested in several other companies he puts in that camp, including Uber, which offers a mobile app that lets consumers hail a town car and gives drivers a “heat map” highlighting the areas where they are most likely to find customers.

GrubHub, another one of his investments, lets consumers order takeout and delivery food from more than 15,000 restaurants online and through mobile apps. In many cases, the service uses a clunky system in which customer orders are sent to restaurants by fax and confirmed by phone.

Recently, though, GrubHub introduced a product called OrderHub that could allow it to become more entwined in restaurants’ operations. OrderHub is a tablet computer running Google’s Android operating system that lets restaurants receive orders electronically, confirm them with a couple of taps and improve the accuracy of delivery time estimates.

GrubHub is giving free tablets to restaurants, which pay a commission for orders received through the system. About 500 restaurants in Chicago and 500 in New York have the devices now, according to the company.

LinkedIn, meanwhile, is finding success in helping human resources departments manage recruiting. The site started as a place where people could advertise themselves professionally and build a network of contacts. Soon corporate recruiters began using LinkedIn to look for new hires.

Small-Business Guide: Small Businesses Open Storefronts on Facebook

Ms. Miller put up a Web site, but about five months later her sister created a Got What It Cakes Facebook page. That’s when the business started to grow. Cake orders went from two or three a weekend to six to 10; now Ms. Miller is turning away another 10 each weekend. Annual revenue at the end of her second year in business was a little more than $40,000.

Got What It Cakes is part of a new wave of online commerce: F-commerce. Social media specialists say the term was coined in 2009 to describe the growing number of businesses that sell through a Facebook page. Payvment, a start-up that provides support for Facebook shopping transactions, says it has 170,000 clients and is signing on about 1,500 stores a week, most with fewer than five employees.

The rise of F-commerce has been largely haphazard, something Facebook did not instigate or promote. A spokesman declined to discuss the phenomenon, except to acknowledge, “Retailers are experimenting in a number of ways.”

Small businesses seem to be having more success on Facebook than large companies, said Sucharita Mulpuru, a retail analyst at Forrester. Those doing well, she said, generally have less than $100,000 in revenue and fewer than 10 employees. Gap, Nordstrom, J. C. Penney and GameStop, on the other hand, have all shut down Facebook stores in the last 12 months, mostly, Ms. Mulpuru said, because consumers are accustomed to the richer experience on retailing Web sites.

But Facebook can present challenges to businesses of all sizes. Some consumers do not feel safe buying directly from a Facebook storefront, said Krista Garcia, a social commerce analyst with a market research firm, eMarketer. And business owners should be aware that they do not own their Facebook pages — Facebook does, and it can change the appearance and rules whenever it wants.

GETTING STARTED It’s easy for a small business to open a Facebook storefront by creating a page in the business’s name, loading photos of the product and adding shopping functions. Because Facebook storefronts can look generic, small businesses have to find ways to differentiate themselves, said Jay Bean, chief executive of an online marketing firm, OrangeSoda.

Customizing a page is done by installing applications that enable customers to do things like shop, enter contests or see a menu. Apps are available from Facebook and outside vendors, or they can be custom-developed.

Payvment’s tools let businesses create a storefront with a shopping cart and promotions like discounts and coupons.

USE YOUR PERSONALITY Unlike larger businesses, small businesses can build on their personal relationships to end users, said Wendy Tan-White, chief executive of Moonfruit, which builds and supports e-commerce Web sites. She advises using a cover image for a business’s page that relates not only to the product or service but to customers, too.

On the Got What It Cakes storefront, for example, the cover photo shows the owner, Ms. Miller, in her home, with baby photos on the wall behind her and several cakes scattered about the sitting room; the smaller-profile photo is the company logo.

Many of Ms. Miller’s customers are busy mothers like her, and she communicates frequently with them on Facebook. “I am a local, one-person business but I have 5,000 fans,” she said.

Ms. Miller gives the kinds of tips her customers might get from a friend, like what to do with leftover chocolate cake batter: “Put some butter on your griddle and make pancakes with it.”

POST, PIN AND TAG To attract fans and friends, a storefront needs to be dynamic, with frequent posts — status updates and photos. Tagging people in a photo may cause the photo to show up on the tagged person’s page, where friends (and often friends’ friends) can see it.

Deann Kump, founder of TuTu Cute, which sells hair accessories and clothing for mothers, babies and toddlers, hosts a monthly photo contest on her page.

“If someone posts a photo of their daughter wearing one of my products and tags it, their friends will wonder, ‘What is TuTu Cute?’ and go to my page,” she said.

Mrs. Kump opened on Facebook last December and about half of her sales occur on the site.

Ms. Tan-White of Moonfruit suggested that a business give customers incentives to spread the word, offering a discount if they tag its product in a photo. Facebook’s “pin” feature allows users to pin a post, which might be a product of the week or a special discount and pushes the post to the top of a business’s page.

FOCUS ON COMMUNITY Magical Moments Modeling made TuTu Cute a “boutique of the month” on its Facebook page in April so friends of both pages could see it. And Mrs. Kump often promotes the work of children’s photographers she likes; they in turn promote her accessories.

Patrick Skoff, a painter who sells 90 percent of his paintings on Facebook, said some visitors to his page might have been hesitant about buying until they saw the comments and “likes” on new and sold paintings.

“They see all the likes and think, ‘Oh, I better buy that before someone else does,’ ” Mr. Skoff said.

In July he painted 10 paintings a day for 10 days and sold all of them through Facebook.

Darren Gann, co-owner of the Baby Grocery Store, started his Facebook storefront in February (he also has a kiosk in SouthPark Mall in Charlotte). Thirty-five percent of his sales come through Facebook, and Mr. Gann gives lots of help and advice to his customers. “They communicate with us there about everything, from asking about a shipment to what do we recommend for a gluten-free 9-month-old."

Heather Logrippo opened a Facebook storefront in 2009 for We’ve Labels, which sells clothing labels. She routinely goes to the Facebook pages where her customers spend time, like those for quilters or knitters.

“I log on as We’ve Labels and start interacting with people, writing things like: ‘That’s a beautiful scarf you’ve knitted,’ ” she said. Those knitters and quilters will often click on the We’ve Labels page out of curiosity.

OFFER OPTIONS While some small businesses sell only through Facebook, others maintain separate Web sites or have bricks-and-mortar outlets, because not all consumers feel comfortable using their credit card information on the site.

Ashley Gall, owner of Méli Jewelry, which sells jewelry she designs and makes, said buying on Facebook was still too new for many of her customers — 15 percent of her sales happen there — so she also sells on Etsy, Indie Fashion Marketplace and her own Web site.

Most of Mandie Miller’s customers order on Facebook and pay when she delivers the cake or when they pick it up. Yet she still maintains a Web site of her own.

“I do a lot of wedding cakes, and it’s the moms and dads of brides usually paying and they often want to go to a regular business Web site. I also have grandmothers in their 80s and 90s that come to my cake tastings,” she said. “They aren’t on Facebook.”

This article has been revised to reflect the following correction:

Correction: July 25, 2012

An earlier version of this article referred imprecisely to recent changes that Facebook made to its site to allow more than one-time payments by letting customers store credit card information on the site. Those changes apply to virtual goods, not real products.