Friday, December 23, 2005

China's Internet Sector 2006 Preview

From Dow Jones Newswires:

Search Market:
"One of the more interesting battles for consumer attention to watch in 2006 will be the contest between Internet search leaders, Inc. (BIDU), Google Inc. (GOOG) and Yahoo Inc. (YHOO). Investors can expect Google to claim an increasing share of China's search market in 2006, as the company's new Beijing and Shanghai based management team begins to leverage the company's legendary marketing strength."

Online Gaming Is Hot:
"Online game developers and operators will be another bright light in China's technology industry in 2006, as early leader Shanda Interactive Entertainment Inc. (SNDA) reportedly plans to spend $20 million in 2006 to promote its new EZ game console platform, and investors watch carefully for early results of this somewhat controversial hardware strategy. Another question is Shanda's long-term strategy of moving mature online games to free operation to encourage spending on "virtual items," and whether other leading game companies will follow Shanda's lead."

"The Yahoo-Alibaba combination is likely to leverage its technology prowess into a run at the online gaming space, either as a game operator or in related areas such as online commerce in virtual items. And investors overlook Tencent's recent entry into the online game space at their peril, considering the company's apparent ability to dominate nearly any Internet sector it chooses to touch, based on its massive population of instant messaging users."

Online video, blogging networks, podcasts, and IPTV:
"The wildest area of China's Internet in 2006 is likely to be the massive conflagration of online video, blogging networks, podcasts, IPTV and other new media that promises to guide the near-term direction of the media sector in China. Yahoo, Google, Inc. (SINA), Baidu, Inc. (SOHU) and Netease are likely to lead the charge in these areas, chased by upstarts like, and countless others."


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