• Marketwatch, Tuesday, December 5, 2006 11 AM

For News Corp., success in China for MySpace will have a lot less to do with the fact that the Chinese government censors content than the reality that the social network doesn't come from there. None of the major U.S. Internet companies dominate their respective sectors in the Chinese market. Even after Google officially set up shop in the country, censoring its content at the behest of Beijing, Baidu.com lengthened its lead as China's top search engine.

Moreover, online advertising isn't the big business in China that it's become in the U.S. and the EU. The investment bank UBS estimates that the country's online ad sales will reach about $3.6 billion in 2010, up from just $538 million last year. UBS also expects search advertising to be the key driver of online sales during that time, growing at a compounded annual rate of 60% in the next three years.

While Google, Yahoo, and eBay have all stumbled in China, the other difficulty facing MySpace is that other social networks already exist. MySpace may be a powerful brand in the U.S. and certain EU countries, but in China, MSN Spaces does very well, as do video-sharing and social networking startups Tudou, Rox, Wangyou, Uume and Mop.

Read the whole story at Marketwatch »