Mary Meeker, the Morgan Stanley analyst who rose to prominence amid the heady go-go days of the 1990s Internet bubble, is feeling bullish again about the Internet. This time, she's cast her eyes on China and has determined that the prospects of China's online gaming industry are particularly rosy.
In a report published on September 12, co-authors Meeker and Richard Ji, another Morgan Stanley analyst, wrote: "We are initiating coverage of the China Internet industry with an attractive view." The report noted China's large and growing population of Internet and mobile-phone subscribers and picked out those industry sectors with the greatest potential.
"Online gaming is our favorite pick," Meeker and Ji wrote in the report.
Indeed, Internet gaming is a booming industry in China, with millions of players logging on every day to play games offered by companies such as Shanda Interactive Entertainment and Netease.com. Online games generated US$298 million in revenue during 2004 in China, up 48 per cent from a year earlier, and could quadruple by 2009, said market researcher IDC in an April report.
If IDC's forecast proves correct, online games will generate revenue of US$1.3 billion in China during 2009.
Morgan Stanley is even more bullish on the prospects of China's Internet gaming market. In their report, Meeker and Ji forecast that online games will generate revenue of US$1.5 billion in China during 2009.
The Morgan Stanley report on China's Internet industry comes at a time of generally heightened enthusiasm among investors for Chinese Internet companies. That enthusiasm was highlighted by the August initial public offering of Chinese search engine operator Baidu.com Inc.
On its first day of trading on the Nasdaq stock exchange, Baidu.com's stock rose to US$122.54 per share -- marking the best opening day for a stock since 1999.