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China closing in on Silicon Valley as home of internet giants, research shows


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Tencent and Baidu are only non-US digital media companies in top 10 by revenue, but country has four of top 10 fastest-growing firms, report says

 

 

Mark Sweney

 

 

Monday 8 December 2014 14.00 GMT

 

 

 

China is eroding Silicon Valley’s pre-eminent position as the home of the world’s largest internet businesses, with two companies making the top 10 by digital media revenue and four among the fastest-growing, according to new research.

 

Chinese internet giants Tencent and Baidu were the only non-US headquartered companies to make the top 10 list of the world’s biggest firms as measured by digital media revenues in a survey published on Monday by research and advisory firm Strategy Analytics.

 

Chinese companies also make up four of the top 10 fastest growing of the 44 firms that are monitored for the survey.

 

Google’s global ubiquity ensures the search giant leads the list by a huge margin, making an estimated $31.4bn (£20bn) in online revenues in the first half of the year, according to the Strategy Analytics report.

 

The next biggest company, Amazon, made less than a third than Google, with digital media revenues of $10.3bn in the first six months.

 

Tencent, which runs social networks, ISPs and online gaming portals in China, overtook Apple’s iTunes ($5.2bn) to rank fourth with $5.4bn in digital media revenues. The Chinese company’s 43% rise in year-on-year revenues put it within touching distance of third-ranked Facebook, which also pulled in $5.4bn.

 

Search engine Baidu moved past Yahoo – the only one of the world’s top 10 to see a revenue decline year-on-year (eighth, $2.2bn) – to take sixth spot with $3.4bn.

 

The remainder of the Top 10 is made up of Netflix (seventh, $2.6bn), Yahoo Japan (ninth, $2bn) and Microsoft Online Services (10th, $1.9bn).

 

“A red-hot Chinese internet market is challenging the historical dominance of US companies,” said Michael Goodman, director of digital media for Strategy Analytics. “The big question, and the key threat to US global dominance, is whether they can translate this success outside China.”

 

Chinese internet security software firm Qihoo was the fastest grower, with revenues up 123% in the first half to $582m.

 

Twitter was second, up 122% to $562m, with Facebook third up 66% to $5.4bn.

 

Chinese firms also managed to take fourth (Baidu up 56% to $3.4bn); seventh (Tencent up 43% to $5.4bn); and 10th (online media company Sina, up 36%)

 

US companies dominate the rest of the top 10 with music service Pandora fifth, games maker Blizzard Entertainment sixth, Disney eighth and LinkedIn ninth.

 

“The fact that there are about 2.5 times more Chinese than Americans online is a big factor so they’ve been able to hit such heights solely in a domestic market,” said Goodman. “The Chinese companies have been particularly adept at generating revenues across a variety of sources.”

 

 

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Robin Li, founder and chief executive of Chinese search engine Baidu. Photograph: JASON LEE/REUTERS

 

 

 

http://www.theguardian.com/media/2014/dec/08/china-closing-in-silicon-valley-digital-media

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