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China's Booming Web Market

The number of Internet users in China grew an astonishing 50 percent in 2007, ending the year at 210 million users, according to the Chinese government. And there's still a long, long way to grow, as 210 million represents just 16 percent of the Chinese population.

More than 70 percent of China's Internet population is under 30. As such, "there is enormous pent-up demand for entertainment, amusement and social interaction," says Richard Ji, an analyst at Morgan Stanley. Chinese Internet companies have seen their share prices rise sharply; their collective market cap is now above $50 billion, having doubled just about every year since 2003, according to the Economist.



So what do people in China spend their money on? The biggest market is mobile Web content delivered to mobile phones. China has over a half million mobile phone users, more than the U.S. Japan, Germany and Britain combined. Consumers buy ringtones, jokes and pictures from mobile Web portals, which charge a few cents per download. On the Web, they play multiplayer online games, paying monthly subscription fees or watch English Premier League matches streamed over the Web with ads. The most dynamic area, though, "and the hardest for outsiders to understand, are online communities, which offer free ad-supported services while charging small fees for add-ons.

Read the whole story at The Economist »

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