Web 2.0 madness grips China
reporter's notebook BEIJING—Forget Silicon Valley—if you want to see a place enthralled with Web 2.0, come to China. — A rising middle class, cheap start-up costs, increasing penetration of PCs and Internet-enabled cell phones, and an ability to tap …
Context & Ripple Effects
This notebook follows four months behind the New York Times' February 2007 report on how China's internet boom was built on virtual fun — the same demand side (a young, paying online audience) now being framed as a supply side for startups. CNET's reporting from Beijing adds the cost-and-access variables: cheap founding costs, rising PC and Internet-enabled cell phone penetration, and a growing middle class.
First-order effects
- Chinese Web 2.0 founders gain a wider runway: low startup costs plus growing PC and mobile access let small teams launch consumer services aimed at the audience the Times profiled earlier in 2007.
- Beijing is positioned as an alternative center of Web 2.0 energy to Silicon Valley, raising its visibility with entrepreneurs and observers watching the sector.
Second-order effects
- Capital and talent attention shifts toward Chinese consumer internet ventures, where the same ideas can be built cheaper against a fast-growing user base than in the Valley.
Third-order effects
- If the pattern holds, the center of gravity for consumer web experimentation stops being a single geography — local versions of Web 2.0 services compete with, rather than follow, Silicon Valley's output.
The trend: Consumer internet entrepreneurship is decoupling from Silicon Valley as China's user growth and low startup costs make it a parallel — not derivative — Web 2.0 market.