How things have changed. The Internet market in China today is as hot as any market I have ever seen. It certainly measures up to even the most optimistic reports that have been coming out. Without getting into too much detail, here are some of my high-level observations so far:

Ad market. It's quite an experience to spend time in a market where advertising in general is booming. All electronic media are growing fast, from television to digital out-of-home to online. Even print media is growing, though not as fast as electronic. Among the various media types, online is growing the fastest; so fast, that companies are still talking about quarter-over-quarter growth numbers that are better than most U.S. companies see year-over-year. Search and e-commerce growth is off-the-charts, and display -- the laggard -- is still growing at 40% year-over-year. The online market leaders here are companies with revenues in the hundreds of millions of dollars (U.S.) and very strong profits, so they are growing on already substantial bases.

General economy issues. I'm traveling with bankers and institutional investors, so you can imagine that the financial services sector meltdown is top-of-mind in every one of our conversations. However, it's not been overly concerning to the management teams that we have met. Rather, they have been most concerned with issues related to the recent Olympics and its impact on ad spend this past quarter. Even with an economy that will grow more slowly this year and next than it did the past several years, all indications are thatmarketers will continue to grow their local marketing and advertising spend at pretty dramatic rates -- the beauty of 8+% GDP growth in a slow-down year!

Online landscape. The Internet landscape in China seems a lot like the U.S. landscape in 1999, but with fewer, wiser companies and real revenues and profits. As in the U.S. at that time, the portals get a lot of attention here. They have lots of traffic and still sell their ads on a fixed price basis. This is not yet a CPM-based market, and there are no real advertiser-driven standards.

Search and search marketing are already taking strong leading roles here, probably similar to the U.S. in 2002 or 2003, but with 2008 technologies and strategies and market capitalizations. The e-commerce and online payment platforms are very well-developed in China and already have a phenomenal number of users, moving goods with values that will soon surpass numbers put up by comparable U.S. companies, offline as well as online. This area really stands out. The Chinese players will sell more goods than eBay or Amazon by 2010.

Casual gaming online is also very, very big here, and the sale of virtual goods is already a big part of the market. Most look to gaming to soon become more important than portals in audience and revenue impact on the market, particularly since entertainment-oriented sites get far less governemtne scrutiny than those that try to carry news.

Management teams. During this past week, I have met some very strong Internet management teams -- as strong as any in the world. They are smart. They are focused. They are driven by strong, clear visions. They know how to lead these companies. They are to a large degree, quite humble. Nothing more to say here. Western world, watch out.

Start-up environment. This is certainly one of the most robust Internet start-up markets in the world. Many of the start-ups in China are growing faster than their U.S. peers, and not just in users and page views, but in revenue and profits as well. Where U.S.-based start-ups might typically raise $3 million to $5 million in their Series A round (first raise of professional investor capital) before they have any revenue. In China, it is quite typical that "Series A" companies already have $10 million of revenue and are profitable. Thus, venture capital can buy more value here, since "bootstrapping" goes much further and scale can be achieved much faster.

The government. The "government" issue hangs over everything in the market. Without question, nothing happens in China that the government doesn't want to happen. At the moment, it appears that the government very much wants a robust Internet and technology industry - ultimately, with a global focus - and is doing everything that it can to promote it. This has been a big boost on the market's development. Of course, all of the successful players must have strong government relations, and non-Chinese companies will never be able to be on the same footing -- just time the load times for Google in the U.S. versus China. But aside from that issue, the government is giving Internet companies much more latitude than may ever thought that they would, and the Internet is certainly helping liberalize the society.

As the ongoing crisis in financial services companies demonstrates, we live in a global economy whether we want to or not. I happen to think that it is a very good thing. I also happen to think that it will be impossible to truly participate in the growth of the online ad economy without participating in the Chinese market in some way. Like it or not, within 10 years, it will likely be the most important online ad and commerce market in the world. If you want to play in that game then, you'd better find your way to China now.