I am traveling to Lisbon this afternoon. This gives me some extra time to read some news on real paper. My choice for this short 2h40 flight was the french paper “Le Monde“. And I found out a couple of very interesting articles and editorial about the evolution of the Internet market in China. I did not translate the articles, they were definitively too long, but here is short summary.
Is China the next Internet Eldorado ? After e-bay, Amazon, Google and MSN, it is now the turn of Yahoo! to invest in a chinese dot-com. Yahoo! announced its intent to buy 40% of Alibaba, an e-commerce web company, the deal is estimated at 1.000.000 USD.
This is the fifth major move on the chinese .com after e-bay and eachNet (180 millions USD), Amazon and Joyo (75 millions), the MSN – Shanghai Alliance Investment agreement for a hundred millions and the Google participation in Baidu (2.6% “only” or 5 millions USD)
As everyone knows, the Chinese market is one of the biggest, with 103 million internet users (mid-2005), China is the second country after the US. But with less than 10% person currently connected (vs. 60% in the US), this market has a tremendous growth potential.
The market valuation of some chinese dot com companies are unrealistic and continue to increase very quickly. Sounds like “deja-vu” ? Are we seeing the beginning of a new dot com bubble ? Watch the market during the coming months.
These investments are not irrelevant. It proves that 10 years after their creation and four years after the end of the bubble, the surviving dot-com companies are well alive and ready to grow and gain market shares again.
But beside the economics, the real question is what Internet are we offering to the chinese ? Government and local authorities control is everywhere. The city of Shanghai, like other cities, are requesting an official authentication number each time you connect (equivalent of passport number or SSN) to be able to track your online activities. Some keywords are “forgotten” by the search engines. Try a search on “democracy”, “tienanmen”, “independent taiwan” on a chinese search engine and you will get nothing but an empty page, while access to the original version of Google, Yahoo! and the like are denied.
Blogging or other kind of free expression is severely controlled and some estimates indicate that at least 60 people are in jail for having expressed their political opinion on the Internet.
All foreign dot-com companies are obliged to sign a contract with the chinese “Association for Internet Access”, granting the government they will not sell or give access to “subversive information”, a category that includes every politically incorrect information : from political opponent’s books to pornography.
But “business is business” for US companies and all are playing the game following the rules imposed by Beijing. How many years will be needed before the people from china will benefit for freedom of speech, freedom and choice of information on the Internet ?
(source : “Le Monde”, 14-15 aug. 2005, page 8 & 13)
Are we starting an Internet with two different sides ? The free one and the controlled one ? What if 50% of the Internet users does not receive the same information as the other 50% ?