Micro blogs blossom on Internet plateau

The rise in the number of internet users has slowed, but the use of micro-blogging is booming

The number of people in China who used the Internet last year was a record 513 million, but annual growth was the lowest in 10 years. The number of those accessing the Internet grew 12.2 percent last year, said the quasi-governmental China Internet Network Information Center.

It is difficult to foresee an increase on a scale as large as before, the center's report said.

The plateauing of numbers was the result of people who are probably going online, - going by their ages, education, and income - and have already become Internet users over the past years, it said.

The Internet population has exploded in China over the past decade, surpassing that of the US in 2008.

Nevertheless, the proportion of China's population who are Internet users, 40 percent, is low compared with that of developed countries.

In Asia, the average proportion of Internet users is 24 percent. China's connection rate lagged behind Japan, South Korea and Singapore, countries where more than 70 percent of the population is online, according to the Internet analysis company Miniwatts Marketing Group.

Yu Bin, CFO of Tudou Holdings Ltd, the second-largest online video company in China, said she believes there is still room for more people to get access to the Internet and for the proportion of users to grow by 40 to 50 percent.

Liu Youcai, general marketing manager of NetEase.com Inc, a Web portal, said: "It's very difficult for a company to cover most of the Internet population, whether it's one with 500 million or 700 million users, and all that finally counts is whether it has good user experience, technology and operation."

The number of those who use mobile devices to access the Internet also grew at a slower pace in the past year, the report said.

There were 356 million mobile Internet users in the country by the end of the year, a year-on-year increase of 17.5 percent.

The slowdown is mainly due to the change in mobile carriers' marketing approaches. In 2009 carriers' lowering of traffic fees successfully encouraged many mobile phone users to access the Internet. However, last year their focus on smartphones contributed little to the increase of mobile Internet users as the prices for smartphones remain high.

"Innovative mobile applications will be a key driver of the mobile Internet user scale," said the report, as this will boost people's demand for Internet access through mobile devices.

Mobile Internet is also one of the areas in which promising Chinese companies are expected to emerge in coming years, said Kai-Fu Lee, the former head of Google China. Other promising areas are social networking and games, he said.

While the rate of Internet user growth has slowed, the number is just one dimension in estimating the value of the industry, said Hu Yanping, general manager of Data Center of China Internet.

The average revenue an Internet company gets from each user is another important factor to look at, he said, adding the companies can improve the average time and expenses users spend on the Web.

Despite the industry's slower growth overall, micro-blogging was a hit over the past year.

The number of Chinese micro-bloggers last year was four times as great as it had been in the previous year, said the China Internet Network Information Center report, the total number standing at 250 million by the end of the year.

Internet users' active participation in and discussion of different events on micro-blogging sites made it the hottest Internet service last year, covering almost half of the country's Internet users.

Major micro-blogging operators, for their part, reported even bigger numbers.

Charles Chao, CEO and president of Sina Corp, the biggest Internet portal in China, said in November that the number of users on Sina Weibo had reached 250 million. The Internet conglomerate Tencent Holdings Ltd also said there were 310 million registered users on its micro-blogging platform.

With the rising popularity of the services, the operators have begun to do experiments of possible revenue generating models, such as advertisements and games, on micro-blogging sites. Chao said last year that the company wanted to monetize the service in the first half of this year.