This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

China's Tech Giants Quietly Grow off Beijing's Internet Controls

Sina, which came out 10 years ago as one of China's top Internet content providers, has seen its Nasdaq share price rise 23% over the past five years. Tencent has seen share prices go up an unfettered 87% since 2007. American Depositary Receipts of Renren, however, have sunk 77% over about the last year.

"Whether such Chinese services are making money is another story, but wherever they are in their development, it's safe to say that they have done much better or gotten much further than they might had they had to face not just local, but global competition," says Mark Natkin, managing director with the Beijing-based market research firm Marbridge Consulting.

China's bans on Dropbox and Google Drive have given growth space to the local Alibaba AliCloud service, for example. Its parent company, Alibaba Group, is expected to do an initial public offering this year after buying a share of a major rival, giant Silicon Valley giant search engine and Internet service provider Yahoo! (YHOO).

With Google searches running slow and the company inert toward China after pulling plugs there in 2010 over censorship and hacking worries, Chinese-owned Baidu (BIDU - Get Report) and local peer Sogou have found plenty of users looking up information online. Baidu share prices are up 86% since 2007.

China's government also didn't build by itself the network that allows its cops to monitor who's surfing what, closing down proxies within days of their debuts and sending out self-explanatory page-cannot-be-displayed messages to users who land on banned sites. Any foreign company that helps China block and filter content would have a fat customer to depend on, but local rivals have caught up.

Hard to say where the foreign aid comes from. Cisco Systems (CSCO) was sued in The United States last year over allegations of designing a firewall to monitor the Internet, but the Silicon Valley networking hardware maker has said it does not customize products to censor or repress people. China-based Huawei Technology makes the same kind of equipment anyhow.

Says Jeremy Goldkorn, founder of Beijing-based Internet research firm (and popular blog) "It's unlikely any American company has made any money since the early days of the Chinese Internet, in the 1990s, before Chinese companies like Huawei had the capacity to make routers and other networking equipment."
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BIDU $175.22 0.00%
RENN $3.05 0.00%
SINA $51.22 0.00%
AAPL $93.24 0.00%
FB $117.81 0.00%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs