China Economy May Be Big, but Google Dwarfs Its Top Internet Company


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The world crossed an inflection point today. China's economy surpassed Japan's as the second largest on the globe. Both remain about one-third the size of the American economy.

But in a country of more than 1.3 billion people, the raw GDP numbers can make China seem misleadingly wealthy. Let's take a look at how the largest U.S. Internet company, Google, stacks up against the top Chinese corporation in the space, Tencent.

Both were founded in 1998, Google in Menlo Park, Tencent in Shenzhen. Tencent went public in June 2004 on the Hong Kong Stock Exchange. Google went public on NASDAQ in August 2004. While Google's growth was fueled by their strong search engine and attendant ad sales model, Tencent's business was -- and is -- built on QQ, an instant messaging service.

We all know how big Google is: the company runs one million datacenters and is the largest Internet company in the world with a market value of nearly $155 billion. They run a highly profitable business.

But Tencent is growing fast. The company released its second quarter earnings report [pdf] last week and the communique for investors is packed with evidence of the stunning scale that QQ has achieved in the Chinese Internet.

More than one billion QQ accounts have been registered, and Tencent counts more than 612.5 million of them as active. At peak times, more than 60 million people are using the service concurrently.

The social networking site that the company runs, QZone, now has 458.5 million active user accounts, nearly even with Facebook's vaunted half a billion users. Its casual game portal tops six million peak users, and Tencent has tens of millions of paying mobile subscribers.

Yet despite all these numbers, Google's revenue numbers still dwarf Tencent's. The American giant pulled in $6.8 billion, while China's top Internet company managed $687 million.

What's the importance of this order of magnitude difference? It shows that China is still a poor country, even though many Americans feel threatened by the speed of the country's growth.

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Alexis C. Madrigal

Alexis Madrigal is the deputy editor of, where he also oversees the Technology Channel. He's the author of Powering the Dream: The History and Promise of Green Technology. More

The New York Observer has called Madrigal "for all intents and purposes, the perfect modern reporter." He co-founded Longshot magazine, a high-speed media experiment that garnered attention from The New York Times, The Wall Street Journal, and the BBC. While at, he built Wired Science into one of the most popular blogs in the world. The site was nominated for best magazine blog by the MPA and best science Web site in the 2009 Webby Awards. He also co-founded Haiti ReWired, a groundbreaking community dedicated to the discussion of technology, infrastructure, and the future of Haiti.

He's spoken at Stanford, CalTech, Berkeley, SXSW, E3, and the National Renewable Energy Laboratory, and his writing was anthologized in Best Technology Writing 2010 (Yale University Press).

Madrigal is a visiting scholar at the University of California at Berkeley's Office for the History of Science and Technology. Born in Mexico City, he grew up in the exurbs north of Portland, Oregon, and now lives in Oakland.

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