TechInvestor -- Net Gain


Mar 28, 1997


Tom Taulli Tom Taulli is director of content development for DirectIPO, an Internet investment firm. Archive of Net Gain Columns		*Net Gain* Q&A: Carol Lin Of Integrated Intelligence Corp. Wednesday, March 26, 1997 Carol Lin founded Integrated Intelligence Corp. to fill a major void, namely the lack of a search engine that lets users perform key-word searches in their own language on any Website or online database. So far, she has been able to establish strategic relationships with Digital Equipment and AT&T. Here are her views on the international opportunities of the Internet. Taulli: Your background is in finance and marketing. Lin: That's right. And this has been a great help for developing financial analysis for my company, as well as earning a competitive return on investment. Although, I have much experience in high-tech, especially in the international arena. I worked at Teleos Communications Inc., which was one of the first ISDN companies. I established and managed the international marketing channels for 12 different countries, ranging from Denmark to Hong Kong. Taulli: For your own company, how do you approach your business plan? Lin: The business plan is very important for us, as well as investors. It is constantly being updated. On the Internet, things always move fast. For example, we have agreed to partner with AT&T for the Pacific Northwest region. This had to be put into the business plan. When we established our relationship with DEC [Digital], we had to put this into the plan. We also put the accomplished milestones for our products and services in our plan. Our plan, for the most part, is very comprehensive. Taulli: Do your partners want to look at your business plan? Lin: Actually, no. They are primarily interested in our product. They want a product that is complementary to their own product line. That's what drives the partnerships. Taulli: Your company started in 1991, before most people heard of the Internet. What did you do when you started? Lin: Our business was primarily LAN and WAN consulting. We helped international clients use technology to take advantage of foreign markets. Our main focus was on Taiwan and China. I was the only person in IIC until 1995. But our projects started to get bigger and bigger. In 1995, I decided to focus the business on Internet applications. Jacob joined IIC full time in late 1995. And later on in April 1996, Joe quit his job with a Wall Street firm, Salomon Brothers, and joined up. Taulli: Was it the Internet that started to propel your growth? Lin: Yes. The Internet changed everything. It was with the Internet that our business started to take off. Taulli: Have you had any outside funding, such as from venture capitalists? Lin: We have had no funding. But now we have a finished product and some high-profile customers; we are seeking either funding from a venture capitalist or from a strategic partner. Taulli: How long did it take to create your product? Lin: It took about an year. It was written in C++. Taulli: On what platforms does it work on? Lin: Currently, our product -- which is called "I-Search" -- works on Linux and DEC Alpha Unix. In fact, because of our agreement with DEC, we were given a free Alpha server to port our software. DEC also provided us tremendous help in porting over the software. It took us about two weeks to port over. Also, we have plans to port over to Sun's Solaris, Hewlett-Packard's HP-UX and IBM's AIX. Taulli: How does the I-Search technology work? Lin: This is basically a search engine that enables international users to conduct searches in their own language. Even if they speak English, it is difficult for people to construct English key-word search phrases or to spell the items they are looking for correctly. The I-Search technology can handle more than 20 different languages. The technology also supports double-byte character formats, which are common for Asian languages. Taulli: What are your target markets? Lin: First, there are a variety of companies that conduct business internationally -- such as Microsoft, Kinkos, Sun, Walt Disney, Comdex show, Internet World Show and so on -- that have Websites that are in various languages. However, you can only search these Websites in English. I-Search is the only technology that can search a site using key-word searches in many languages. Taulli: Would DEC be a candidate for their sites? Lin: Yes. It looks like DEC has a different site in different languages. Therefore, each site may need a search engine for searching. Taulli: What's another target market? Lin: We are talking to many large ISPs [Internet service providers]. They are in a very competitive business and need to offer value-added services to their customers. If an ISP installs I-Search onto its server, all the sites hosted in that server can be searched in multilanguages. This is a very valuable feature to their clients who conduct business internationally. And many customers use the Internet for foreign trade, which is what our product helps to accomplish. Government institutions can use it. We had immigration offices, California DMV, ... visiting our booth [at IWorld] and asked about this feature, since they need to deal with populations that are not fluent in English. We are also targeting publishers that have their online publications in many languages. The key for us is to educate our customers about our technology. In America, there is not as much consciousness about foreign trade. Perhaps that is why we have such large trade deficits. Another market we are hitting is import-export. We are gearing toward medium to small businesses in this area. Basically, our technology is highly useful for those companies that have large catalogs of products. By using I-Search, a company can greatly expand its market size. Taulli: What does it take to set up the software? Lin: It is fairly plug-and-play. We do provide consulting and help in installing the software. The real key is showing the companies the importance of the software and how it can really leverage their business. Taulli: Your company provides mirror site hosting. Why? Lin: Much of our business is providing a business channel to Asian markets, especially China and Taiwan. We are basically creating a gateway between these countries and the West. The problem with some Asian countries is the bandwidth. It takes forever to download a page. For example, in China, for a user to download a page from an outside server can take up to about 15 minutes. It is not much better in Taiwan. I remember one case where it took 12 hours to download Netscape Navigator. This was a combination between having a slow connection and the fact that the connection broke several times. The other problem is that users in some countries -- such as China, Taiwan and Russia -- must pay a per-minute charge to make local phone calls and a per-megabyte charge to download information. Since downloaded information is considered foreign goods, there must be a payment of duties on the downloaded file. As a result, the cost of downloading could be very high. Our solution is to have a local mirror site in China. There is no need to pay duties, and the connection is much faster and cheaper. Also, our server in China allows for direct dial-up. This is similar to a BBS [bulletin board system]. So, the user does not have to have an Internet account. Taulli: What are the trends in the Asian markets for the Internet? In China, the TV, radio and print journalism are controlled by the government. People have a deep desire for real information, real news. And they will wait 15 minutes for it and pay money for it. Also, many computers are manufactured in Taiwan and Hong Kong. So, the people in these countries have low-cost and easy access to personal computers. More and more people in Asia are purchasing computers and using them to communicate with each other -- especially overseas to conduct business. In Asia and Europe, foreign trade is very important. The main reason is that these countries are not self-sufficient and rely on natural resources from other countries. And compared to any other form of communication, the Internet is low-cost. It is cheaper than the phone. For example, to make a call from the United States to Taiwan will cost about 60 to 70 cents a minute; to make a call from Taiwan to the United States will cost $1.50 to $2.00 a minute. So more and more people in Asia are using E-mail to communicate. But they want to use their own language. That's why we are so excited about our product. The most widely owned communication device, besides the telephone, in Asia is the fax machine. Why? The reason is that it allows you to communicate in any language. You write your message on paper and transmit it. The Telex, on the other hand, was not as popular, since it was English-based. Our product makes the Internet more like the fax machine, since we allow people to search in their own language. Taulli: Who is your main competition? Is it the search engines, like Yahoo? Lin: We believe the major search engines will enter our market. Where there is a market, there is always competition. But since we have been in this market first, we have a great advantage. So far, we have a dominant position in China. We have an agreement with NCIC/ChinaNet, which is the Chinese ISP. We can provide a full-package for any company that wants to promote their business over the Internet in China. Our multilanguage mirror server is now up and running in ChinaNet Beijing Central Office. There are search engines that have limited support for multiple languages, but no one has as extensive multilingual support as our product. Our technology allows you to search in 20 or more languages simultaneously. Taulli: What would your prefer, an investment from a venture capitalist or an investment from a corporate partner? Lin: What we are looking for is a partnership with a major company that has a large channel in international markets. Our ideal partner is the one that can bring us both funding and distribution.