The China Pages Gamble: Partnering with Hangzhou Telecom and Losing Control

The early morning breeze blew in from West Lake, carrying a damp chill. In the office, a fax machine was whirring, spitting out a new cooperation letter. At the top, in black and white, was the suggested new letterhead: "Hangzhou Telecom Data Multimedia Center — China Pages Project."

Imagine you're a scrappy founder who has just landed your first batch of clients. A giant partner offers you the bandwidth, data centers, lines, and channels you've been dreaming of, even willing to lend you its golden brand name. The price? Just change the letterhead, merge the customer hotline, and temporarily let them host the domain. What would you do?

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What you'll learn from Jack Ma's story:

• Put the "Steering Wheel Clause" on page one: Before partnering, clearly define who has the final say on product, customers, and core assets.
• Beware the snowball effect of small concessions: From the invoice letterhead to the customer hotline, then to the domain and servers—this is a classic slippery slope to losing control.
• Maintain partnership boundaries: Understand the fine line between helpful "process optimization" and a "system integration" designed to absorb you.
• How to make a graceful exit when control slips: Preserve your core assets, reassure your core customers, and keep the embers alive for a new start.

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A Door Opens: The First Meeting in Autumn 1995

"We have the bandwidth, you have the customers."

Steam gently rose from the disposable paper cups in the conference room. Three people from Hangzhou Telecom were there, their badges reading "Business Development." They cut straight to the chase.

"We have the bandwidth and data centers; that's our strength. You have customers and the ability to create the webpages; that's your strength. If we work together, we can move much faster."

These were practically the words Jack Ma had been longing to hear. For the fledgling "China Pages," bandwidth was oxygen, and a data center was a heart. In that era of wild growth, speed meant survival.

A "Sweet" Contract

The contract was thick, but the terms seemed straightforward: a joint project, revenue sharing, a shared customer hotline, and resource support from Telecom. At the very end, a small clause tucked away in the "supplementary terms" seemed innocuous: For ease of unified maintenance and management, the project's domain name and servers will be hosted by the Telecom side.

"We can start with this," he told his partners, trying to keep the excitement out of his voice. "Let's just get running first."

The moment he signed, his hand still trembled slightly. At that point, the excitement for the future outweighed any fear of the unknown.

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The Boiling Frog: From Small Concessions to a Major Drift

From Letterhead to Hotline

In the first week of the partnership, the invoices issued by China Pages were changed, as requested, to bear the letterhead "Hangzhou Telecom Data Multimedia Center—China Pages Project." In the second week, it was suggested that their customer hotline be merged into Telecom's unified number, the reason being "to enhance brand image and provide a more professional service experience."

"It's just process optimization," their contact explained.

"Okay, let's enhance the experience first," he nodded. Some on his team frowned, but he waved them off, signaling that they shouldn't waste energy fighting over titles and names.

From Domain to Servers

In the third week, that supplementary clause became a reality. The data center was at Telecom, the servers were at Telecom, and finally, even the DNS records were all migrated to Telecom's hosted domain. The site's speed and stability did indeed improve. Some old clients even started calling to praise them for becoming "more professional."

But it was also this week that he began to notice a small detail: some new clients, sourced through Telecom's channels, were being directed straight to Telecom's own account managers. The price sheets handed to these clients had been quietly replaced with Telecom's templates.

"This is to align with the promotional efforts," the explanation was, as always, flawless. "A unified script is better for marketing."

He said nothing. He just went back to the office and silently wrote four keywords on the whiteboard, arranged in chronological order: Letterhead, Hotline, Domain, Server.

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The Midnight Outage: An Epiphany About "The Switch"

At 2 AM, a piercing phone call jolted him from his folding cot. "Jack, the site is down!"

He and his partner rushed to the Telecom data center building. The night guard yawned, slowly making them fill out a visitor log. They waited for twenty anxious minutes in the cold lobby before being led to the chilly server room. The server lights were blinking normally. The problem was with the DNS records—someone on the backend had performed a "unified adjustment," and the new records had not yet fully propagated globally.

"Who changed it?"

"A unified adjustment from higher up," the on-duty engineer replied without even looking up.

He stared at the cold English letters on the screen. In that moment, he felt like a homeowner who had given the keys to a property manager, only to find the manager had changed the locks.

At 4:30 AM, the site was finally back up. He called three of his most important clients one by one to apologize. "It's working now. I'm very sorry." On the other end, he could hear their tired breathing, and a soft "thank you." After hanging up, he wrote a question in his notebook with heavy strokes: Who holds the master switch to our business?

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An Org Chart and the Final Boundary

"We are not an outsourcer."

In another project meeting, a Telecom colleague laid out a printed "Project Team Organizational Chart" on the table. On that chart, the "China Pages" team was neatly placed inside a dotted box labeled "Business Partner."

"We are not an outsourcer," he said, his voice quiet but clear.

"Of course not," the other party smiled smoothly. "This is just for ease of management."

He paused, then took a pen and drew a thick circle around the words "Business Partner." Next to it, he wrote a single word: Boundary.

When Customers Start to Waver

That evening, he received a call from an old client, who asked hesitantly, "Mr. Ma, for renewals in the future, should we just go directly to Telecom?"

"You can contact them for after-sales service," he paused, then added in a firmer tone, "but if you want to change your webpage or do a new design, you must come to us. We are faster."

After hanging up, he wrote the word "Faster" on the whiteboard. He was beginning to understand a painful truth: When you are losing the power to define who you are, you must use "what you do better and faster" as your last line of defense.

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The Showdown and the Exit: A Graceful Retreat

"A family needs to be even clearer about things."

He made one last attempt to communicate. At a teahouse by West Lake, he met with the head of the Telecom department. "We need to clarify a few points," he said, writing on a napkin:

1. Who decides the final form of the product?
2. Who controls the core customer relationships and has signing authority?
3. Who safeguards the core digital assets—the domain, the servers, the codebase?

The executive glanced at the napkin, then smiled and pushed it back. "We're one big family. No need to draw such fine lines."

He smiled back, but the smile didn't reach his eyes. "It's because we're a family that we need to be even clearer."

By the time they finished their tea, the only promise he received was, "Let's have another meeting next week to discuss it."

He knew there would be no "next week." He had to make a choice before the name "China Pages" was completely diluted into a mere project code.

Taking Back the Steering Wheel

That night, he gathered his core team in the office. Everyone held a cup of hot tea. The table was littered with the notices bearing the Telecom letterhead. He spoke slowly, but every word carried weight:

"We have to take back the steering wheel. It might be slower for a while, it might be a lot harder, but we need to build a business that we can proudly call 'ours.'"

Someone asked, "What about Telecom's resources...?"

"We'll continue to cooperate on business where we can. But on anything that involves control, we take it all back."

The decision was made that night. Back up all the code and customer data. Register and file for backup domains. Contact independent third-party data centers. And then, call every core client, one by one, to explain the situation.

A Letter and a Shoebox

That weekend, he wrote a short letter to all his clients:

"If one day you call our number and another company answers, please hang up and dial our other number again. We will answer on the first ring."

At the bottom, he signed just two words: "China Pages."

On the day they moved out of the shared office, he personally carried a shoebox filled with backup tapes and customer files. Someone asked why he didn't just put it in a cardboard box. He smiled and said, "This, I can't let out of my hands."

That shoebox was the most valuable lesson he learned from that costly partnership. The next morning, he placed it reverently in a drawer in their new office. Outside, the sky was just beginning to lighten, and the sounds of the city were slowly rising again.

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Bringing it Back to You: A Warning Bell on Partnership and Control

You too might face the same temptation: faster bandwidth, a bigger brand, smoother channels. Before you nod your head, play a few scenes forward in your mind:

• When the first line of the invoice letterhead is changed, who will care about the second line that has your name?
• When the customer hotline is merged into a unified number, how many extensions will your customer have to navigate to reach you?
• When the domain and servers are hosted in their data center, whose drawer really holds your code, your data, and your backups?

If one day you're standing in a hallway and feel the wind blowing you in a direction you can't fight, ask yourself immediately: Do I still have my hand on the steering wheel?

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Key Takeaways

1. The "Steering Wheel Clause" Must Be on Page One: Before partnering, use black and white to clearly define ownership of product decisions, customer relationships, and core digital assets. Never let it be a "supplementary term."
2. Beware the Sequential Effect of Small Concessions: From the letterhead, to the hotline, to the domain and servers—this is a classic slippery slope from losing brand identity to losing control of core assets. Each step seems reasonable, but they are all linked.
3. The Three Steps of a Graceful Exit: Back up your assets, reassure your core customers, and ensure a smooth transition. Preserving your reputation and the embers for a restart is far more important than winning an argument.
4. Counter a Brand Deficit with Speed and Service: When your brand name isn't as loud, let your service—being "faster, more direct, and more knowledgeable"—become your best business card.