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  • By almost every measure, China's growth is extraordinary. But behind the astonishing statistics is a more complex reality.
  • 23 July 2008

China Surpasses U.S. in Number of Internet Users

China said the number of Internet users in the country reached about 253 million last month, ahead of the U.S., thanks to a powerful surge in Internet adoption in the past few years.   By DAVID BARBOZA

By DAVID BARBOZA

Published: July 26, 2008

SHANGHAI — China said the number of Internet users
in the country reached about 253 million last month, putting it ahead
of the United States as the world’s biggest Internet market.

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Diego Azubel/European Pressphoto Agency

An Internet cafe in China. The majority of the country’s Internet users are 30 or younger.

The estimate, based on a
national phone survey and released on Thursday by the China Internet
Network Information Center in Beijing, showed a powerful surge in
Internet adoption in this country over the last few years, particularly
among teenagers.

The number of Internet users jumped more than
50 percent, or by about 90 million people, during the last year, said
the center, which operates under the government-controlled Chinese
Academy of Sciences. The new estimate represents only about 19 percent
of China’s population, underscoring the potential for growth.

By
contrast, about 220 million Americans are online, or 70 percent of the
population, according to the Nielsen Company. Japan and South Korea
have similarly high percentages.

Political content on Web sites
inside China is heavily censored, and foreign sites operating here have
faced restrictions. But online gaming, blogs, and social networking and
entertainment sites are extremely popular among young people in China.

The survey found that nearly 70 percent of China’s Internet users were
30 or younger, and that in the first half of this year, high school
students were, by far, the fastest-growing segment of new users,
accounting for 39 million of the 43 million new users in that period.

With Internet use booming, so is Web advertising. The investment firm Morgan Stanley
says online advertising in China is growing by 60 to 70 percent a year,
and forecasts that by the end of this year, it could be a $1.7 billion
market.

China’s biggest Internet companies, including Baidu, Sina, Tencent and Alibaba, are thriving, and in many cases are outperforming the China-based operations of American Internet giants like Google, Yahoo and eBay.

“The Internet market is the fastest-growing consumer market sector in
China,” said Richard Ji, an Internet analyst at Morgan Stanley. “We are
still far from saturation. So the next three to five years, we’re still
going to see hyper-growth in this market.”

Baidu, for instance,
said on Thursday that its second-quarter net profit had jumped 81
percent. During that period, Baidu had a 63 percent share of China’s
search engine market, while Google had about 26 percent, with Yahoo
trailing far behind, according to iResearch, a market research firm
based in Beijing.

Tencent, a popular site for social networking
and gaming, now has a stock market value of $15 billion, making it one
of the world’s most valuable Internet companies. In comparison, Amazon.com is valued at about $30 billion.

One measure of the growth of the Internet here, and its social and entertainment functions, is the popularity of blogs.

The site of China’s most popular blogger, the actress Xu Jinglei, has
attracted more than 174 million visitors over the last few years,
according to Sina.com, the popular Web portal, which posts a live
tally. According to Sina, 11 other bloggers have also attracted more
than 100 million visitors in recent years.....