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 Holdings Ltd (騰訊) and Baidu Inc (百度) 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 US$31.4bn in online revenues in the first half of the year, according to the Strategy Analytics report.
The next biggest company, Amazon.com Inc, made less than a third than Google Inc, with digital media revenues of US$10.3 billion in the first six months.
Tencent, which runs social networks, Internet service providers and online gaming portals in China, overtook Apple Inc’s iTunes (US$5.2 billion) to rank fourth with US$5.4 billion in digital media revenues. The Chinese company’s 43 percent rise in year-on-year revenues put it within touching distance of third-ranked Facebook Inc, which also pulled in US$5.4 billion.
Search engine Baidu moved past Yahoo Inc — the only one of the world’s top 10 to see a revenue decline year-on-year (eighth, US$2.2 billion) — to take the sixth spot with US$3.4 billion.
The remainder of the top 10 is made up of Netflix Inc (seventh, US$2.6 billion), Yahoo Japan Corp (ninth, US$2 billion) and Microsoft Online Services (10th, US$1.9 billion).
“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 (奇虎) was the fastest grower, with revenues up 123 percent in the first half to US$582 million.
Twitter Inc was second, up 122 percent to US$562 million, with Facebook third up 66 percent to US$5.4 billion.
Chinese firms also managed to take fourth (Baidu up 56 percent to US$3.4 billion); seventh (Tencent up 43 percent to US$5.4 billion); and 10th (online media company Sina, up 36 percent).
US companies dominate the rest of the top 10, with music service Pandora Media Inc fifth, games maker Blizzard Entertainment Inc sixth, Walt Disney Co eighth and LinkedIn Corp 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,” Goodman said. “The Chinese companies have been particularly adept at generating revenues across a variety of sources.”
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