The number of Internet users in US constitutes 71 percent of its entire population while the Chinese netizens constitutes only 19 percent of entire population. The figures itself indicates that China will hugely outnumber US in near future. CNNIC, China's official net monitoring body, told BBC, "This is the first time the number has drastically surpassed the United States, becoming the world's number one". Since last year the number of net users have shown 56 percent increase and it is predicted that it will continue to increase by around 18 percent per year.
The Internet market is booming in China and so is the Web advertising. According to the investment firm Morgan Stanley, on-line advertising market in China is growing by 60 to 70 percent a year. By the end of this year it could touch a $1.7 billion market. “The Internet market is the fastest-growing consumer market sector in China. We are still far from saturation. So the next three to five years, we’re still going to see hyper-growth in this market.”, said Richard Ji, an Internet analyst at Morgan Stanley.
China’s topmost Internet companies, including Tencent, Baidu, Sina and Alibaba, are flourishing and are outperforming the China-based operations of American Internet giants like Google, Yahoo and eBay. The upcoming Beijing Olympics has partly helped the advertising sales. Riding on this wave the Chinese search engine, Baidu showed an 87 percent increase in profits in the second quarter of 2008. Baidu is currently holding a market share of 63 % in the Chinese search market. Its closest rivals, Google holds 26% of the Chinese search market, while Yahoo holds only 8 percent.
Though China tops in the race of the number of Internet users but it has yet to catch the US in terms of total revenue generated. The figures released by Analysys International states that China's Internet firms made total revenues of $5.9billion in 2007. For the same period US combined Internet revenue was around $21.2billion.