1 2 3 50% growth Handbook of Online China

Handbook of Online China Brought to you by: Olympics Eve, August 2008

Brought to you by: 1 . China Leads WWW

253 M 223 M Source : CNNIC

Source : eMarketer ,Nielsen ,CITA Country Mobile Phones (MM) Internet Users (MM) Mobile Phone to Internet Users Ratio China 574 221 2.59 :1 US 256 216 1.18:1 Japan 107 89 1.2 :1 South Korea 43.49 34.4 1.26 :1 UK 70.99 36.8 1.93 : 1

~ Half of Top 20 Trafficked Asia Pacific Sites are in China * Asia Pacific Reach Source : Comscore Rank Site Name Country Reach * 1 Yahoo ! Sites USA 66.8 2 Google Sites USA 62.5 3 Micros. Sites USA 57.9 4 Baidu.com China 22.7 5 Tencent China 22.7 6 Wikipedia Sites USA 20.1 7 SINA.com China 18.5 8 NetEase China 15.2 9 eBay USA 15.2 10 CNET Networks USA 15.1 Rank Site Name Country Reach * 11 Amazon Sites USA 14.3 12 Sohu.com China 14.2 13 Alibaba.com China 13.1 14 Apple Inc USA 12.9 15 AOL USA 12.2 16 Rakuten Japan 11.2 17 Friendster USA 11.2 18 FC2 Inc Japan 10.8 19 NTT Group Japan 10.0 20 Xunlei Networking China 9.9

Brought to you by: 2. China Insider

Growth of Internet Users In Million China's Internet Penetration Rate At the end of June 08, China's Internet penetration rate reached 19.1% . This rate was slightly lower than the global average of 21.1% Internet penetration rate . Source : CNNIC

68.6% of Chinese netizens are 30 years or younger. 39% of netizens are high school graduates.30% of the users are students. 30.5% of netizens monthly earn below 500 Yuan ($ 68.50). Female represents 46.4 % of netizens. Source : CNNIC

Source : CNNIC

JingJing & Chacha are Chinas virtual cops who can walk, bike or drive across the screen every 30 minutes , warning Internet users to stay away from “ illegal Internet content ” and “ bad websites ”. <ul><li>85% of Chinese Citizens approve Internet Censorship. </li></ul><ul><li>93% of internet users reports they consider much of internet content to be unsuitable for children. </li></ul><ul><li>Over 4 years of tracking user reaction, trust in the reliability of online content has fallen by one-half, from 52% in 2003 to 26% today. </li></ul>Source : Pew Internet

3. Top Players – Online China

Source : Comscore 1 2 3 4 5 6 7 8 9 10

Source : Comscore Rank Site Name Unique Visitors Major Business 1 QQ.Com 62,248 IM 2 Baidu.Com 60,174 Online Ad ( 64%) 3 Sina.Com.Cn 48,373 Portal (Online Ad) 4 163.Com 40,805 Portal (Online Game) 5 Yahoo.Com.Cn 38,852 Paid Search 6 Google.Cn 34,882 Paid Search 7 Sohu..Com 31,184 Online Games & MVAS 8 Soso.Com 30,602 Paid Search 9 Microsoft.Com 27,999 Online Ad ,SNS 10 Taobao.Com 25,778 Online Auction

2008 Q2 China Search Market Source : Comscore , Analysis International Google share of search

3. China 2.0

Prepared by Yupoo.com for China Blogger Conference 2007 , Beijing. IDC :By 2011, China’s Web 2.0 market will reach US$645.8M Web 2.0 logo postcard

Comparison Index to Global Average Share of Daily Usage on Various Categories Reading Blogs Writing Blogs China ranks above daily Global average in reading & writing blogs Source : Universal McCANN Korea China France Germany Japan UK US

Comparison Index to Global Average Share of Daily Usage on Various Categories Social Network Uploading Photo China ranks above daily Global average in social networks & photo upload Source : Universal McCANN Korea China France Germany Japan UK US

Comparison Index to Global Average Share of Daily Usage on Various Categories Uploading Video Watching Video Clips China ranks above daily Global average in uploading & watching videos Source : Universal McCANN Korea China France Germany Japan UK US

Comparison Index to Global Average Share of Daily Usage on Various Categories Downloaded Podcasts Subscribed RSS China ranks above daily podcast download & RSS subscribes Source : Universal McCANN Korea China France Germany Japan UK US

BBS in China are acting as ecommerce hub & grape vine to spread buzz like “ Fake Tiger Scams “ & “ Nail House ” . Per Day Time Spent on BBS Sites 60% of users - at least 3 BBS sites more than 3 times each week. 98% of users have contributed to a BBS by publishing articles, replying to posts, participating in polls, etc.. Source : iResearch Time Spent / Day % of Users 1-3 Hrs 36.3% 3-8 Hrs 44.7% More than 8 Hrs 15.1%

Top 10 video sites by Unique Visitors <ul><li>Over 160 million online video users in China by the end of 2007. </li></ul><ul><li>65.9% user view online videos by visiting video site, 63.7% through recommendation by friends, 56.3% though search engine, and 42.5% through links of other websites. </li></ul><ul><li>Over 86.3% users would like to watch movies and TV episodes online. </li></ul><ul><li>About 94.1% users tend to use IM, as QQ or MSN, to share videos with friends </li></ul>CNNIC Stats Source : Comscore , CNNIC

<ul><li>QQ is the undisputed leader ( 40.3 M peak concurrent users ) </li></ul><ul><li>IM is popular among 18-30 </li></ul>Source : CNNIC, Analysis International

Facebook (“Rebel Alliance” ?) FB apps FB apps FB apps FB apps iLike = Announced Platform / API = Unannounced Platform / API RockYou Slide Flixster Widgets Widgets SocialMedia ClearSpring Widgetbox Gigya iGoogle Google Gadgets MySpace (“Clone Army”?)

Xiaonei Apps Apps = Announced Platform / API = Unannounced Platform / API Widgets Widgets Hainei Apps Apps Widgets Widgets Widgets 5GSNS UCenter QQ? MySpace.Cn

3. Business – Online China

Source : Cheil , Zenith Optimedia

Source: Company Reports; Figures rounded off 2004 : MVAS revenue was 2x > than Online Gaming & 3x > than Online Ad. 2008 : Gaming & Online Ad Market are real HOT ! Company 2008 Q1 Revenue Million US $ % of Revenue Operating Margin MVAS Gaming/IVAS Advertising Sohu $84.4 10% 49% 41% 40 % Baidu $ 81.9 - - 100% 27 % Sina $71.3 33% - 67% 19 % Shanda $111 - 97% 3% 40 % NetEase $93 - 86% 14% 63 % Tencent $204.1 20% 70% 10% 51 % Total $ 646 11% 58% 31% 40%

1 2 3 50% growth in online advertising market in China in 2008, driven by 2008 Beijing Olympics. The branded advertising market will witness a 38% YoY growth rate in 2008. PPC search market enjoys a higher growth rate of 82% to $562 million. Baidu will remain dominant player to take around 65-70% market share . Source : JP Morgan

Million China’s mobile market remains a 2G market (including EDGE, GPRS, 1x). GSM dominates China’s mobile market with over 540 M subs, or 90% of the market. Source : Company Info

<ul><li>SMS is the primary means of communicating using a mobile device, though almost 10% used an IM service. </li></ul><ul><li>Less than 3% accessed a Social Network or blog, and even fewer watched mobile TV or video. </li></ul><ul><li>Even “utility” categories such as weather and news have low penetration from mobile devices . </li></ul>News , Info & Search Top 10 Categories Entertainment Communications

iPod owners express interest in the iPhone Source : Pearl Research 68 % heard about iPhone trendiness and design Key Reason To Buy 88 % $ 500 Reason of Disinterest ? iPhone copycats $200 - $300

Brought to you by: Stay Tuned.. Olympics 2008

China’s Olympic: August 2008 official Olympics website

China’s Olympic: Who’s Following? Australian and New Zealand audiences are leading the charge to the official Olympics website i

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1 2 3 50% growth Handbook of Online China

Taly Weiss

1 2 3 50% growth