China's Internet boom

Yahoo! Inc.'s China Web site warns users they're not allowed to post content that "divulges state secrets, subverts the government or undermines national unity." Yahoo's India site has no such prohibition.

Undeterred by China's restrictions, Yahoo, owner of the world's most-visited Web portal, last week paid $1 billion for a 40 percent stake in China's biggest online commerce firm, Alibaba.com.
Yahoo invested $120 million in a Chinese search engine in 2003. In 2004, it started an auction site in China, where total online revenue hit $1.1 billion.

India, an English-speaking democracy that allows freer flow of information, had online revenue of just $93 million.

"It does seem ironic that India, with its democratic government and free press, is so far behind China in developing its Internet market," says David Wolf, managing director of Wolf Group Asia, a Beijing-based regional consulting firm.

"The simple reason is that China has the infrastructure and India doesn't," he said.

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