Chinese Internet users spent 276.76 billion yuan (US$35.51 billion) on Internet services in 2006, close to 50 percent more than the previous year, as the number of netizens rose to 136 million by the end of 2006, the Internet Society of China said yesterday.

 

The society announced, in its Internet Guide 2007, jointly prepared with consulting firm DDCI, that Chinese Internet users spent around 170 yuan (US$21.8) a month on services such as Internet connection, online shopping and online games last year, almost 8 percent higher than the amount in 2005.

 

The total consumption increased along with the number of Internet users, which rose from 111 million at the end of 2005 to 136 million in 2006.

 

The report was the first such written by the society on the Internet sector, which covers 50 categories and surveyed over 80,000 individuals and 900 companies.

 

The China Internet Network Information Center, which has so far released 18 sets of statistics on Chinese Internet users every six months, is yet to release its own figures.

 

"The result of this report shows the growth has been very strong, but this industry is still in a very rudimentary stage," said Huang Chengqing, secretary-general of the Beijing-based organization.

 

The report also said 20.8 million Chinese were frequent bloggers, while 101 million routinely read blogs.

 

Beijing-based Sina held its title as China's No.1 Internet portal, but its NASDAQ peer, NetEase, overtook Sohu to become the second most popular portal in the world's second-largest Internet market after the US.

 

"In China, integrated service providers like portals have a natural reason to exist, because the size of the market is small and Chinese users' knowledge of the Internet is highly concentrated," said Hu Yanping, one of the authors of the report.

 

Online advertising, the principal revenue source for Internet portals, saw a sustained high growth of over 50 percent to 5 billion yuan (US$641.5 million) in 2006, up from 3.3 billion (US$423.4 million) in the previous year.

 

In the highly competitive search engine market, brisk growth was measured up from 1.05 billion yuan (US$134.7 million) in 2005 to 1.57 billion yuan (US$201.4 million) in 2006.

 

The report showed 80 percent of Chinese users preferred on Baidu, while 36 percent trusted Google and 26 percent use Yahoo! China.

 

Domestic firm Baidu only cornered 40 percent of the market share in terms of revenue, while Google closed the gap to 18 percent. Recent reports put Baidu's share as twice that of Google's in China.

 

(China Daily January 11, 2007)