Tuesday, September 16, 2008

China, the mobile web, Google Chrome and the future of the Internet

This will be the first Economics and the Internet blog to be read by most of the students who have just enrolled on this year's Internet for Business Economists (IfBE) module at the University of Surrey. I usually try to enthuse a new batch of students by picking out some current developments that connect with some of the topics they will be studying.

An obvious starting point this time is the news that China has overtaken the United States to become the country with the greatest number of Internet users. (This will be particularly interesting to those students on the course who come from China.) According to the Economist (2008b) there are now over 250 million Internet users in China. John Markoff, writing in the New York Times, (Markoff, 2008) had earlier reported that China overtook the US in June. He notes that there are economic forces driving this trend, as China and the other fast growing economies invest in the nation's infrastructure. Of course in terms of Internet penetration (the proportion of that population using the Internet) China has a long way to go. A report in the Economist in January 2008 (Economist, 2008a) gave a figure of 16% at the end of 2007 for China compared with around 70% for the USA.

Not only is the geographical pattern of Internet use shifting, but so too is the mode of access. As the September Economist article reports, 29% of Internet users in China (over 73 million people) use mobile phones to go online. And, according to the China Internet Network Information Centre, this is where the growth in Internet access is mainly coming from in China (it rose by 45% in the six months up to June). This shift of focus towards mobile access is one of the most important Internet trends, and it will no doubt affect the way that many web sites are structured for delivering information to users. The Economist article also discusses the potential for mobile banking and mobile phone based payment systems. But the main point that the author makes is that developing countries now have the possibility of leap-frogging the industrialised world in the era of the "mobile web".

Another interesting development this month has been the launch, in beta version, of Google's new web browser Chrome. You can view a "comic book" style introduction to Chrome on the Google web site (Google,2008). Of course Microsoft's Internet Explorer still has the greatest share of users in the browser market (74% compared with the Mozilla Foundation's open-source browser Firefox which now has 18%). But once Internet Explorer had well over 90% of the market (having crushed its earlier rival Netscape). Analysts see Chrome as part of Google's strategy to take on Microsoft, with Chrome functioning not just as another browser but one designed to become the online operating system specially developed to support the growing number of "Software as Service" web-based applications. Google itself has a number of these in its Google Apps suite - a spreadsheet, a word processor etc - which enable users to create files to be stored on Google's servers. This approach enables file sharing from anywhere on the Internet, not just on a local network - a big advantage in the Web 2.0 era where collaborative projects are so important.(Another term that you will come across in these discussion is "cloud computing" which is about giving companies access to computer power and programs not on their in-house servers but on computers around the world that are connected to the Internet.) If users can be persuaded to use these online software products rather than Microsoft's desktop applications then Google can really challenge Microsoft's position. Users would need only a very basic operating system on their PCs - perhaps an open-source product rather than Windows (which to many users is expensive and bloated).

There are many other interesting developments taking place right now, but I won't try to deal with them all in one post. Please leave a comment and come back again!


  1. The Economist (2008a) Alternative Reality, 31st January.
  2. The Economist (2008b) The meek shall inherit the web, 4th September
  3. John Markoff (2008) Internet Traffic Begins to Bypass the US, New York Times 30th August
  4. Google (2008) Chrome