Kevin Huang, founder of Hong Kong-based Internet advertising company Pixel Media, predicts three Internet trends for China in 2008:

Trend 1- Complacency by China’s established media

Buoyed by great ad sales from the Olympics, China’s traditional media companies will fail to develop their online media properties. These companies will, however, wake up with a hangover and realize their mistake when the party ends next year, so get ready to sell that Facebook clone to the People’s Daily in 2009!

Trend 2- Growth of the Internet in all ways

Surfers: China’s long march to become the world’s largest online population will move ahead this year. Currently around 210 million people online now (compared with 225 million in the US), Huang predicts 500 million users within five years.
Advertising: Huang predicts China’s online adspend – a topic discussed at length on this blog – will grow to US$1 billion this year. For scale, this compares to US$1.4 billion spent on all advertising combined in Hong Kong.
Continued concentration: Huang sees little shift from the 60 percent of market share of advertising for five sites: Sina, Sohu, QQ, Netease and Alibaba.

Trend 3- Consolidation of the clones

Even China cannot sustain 20 YouTube clones and five Facebook clones. (Huang reckons China has room to sustain two YouTube clones and one Facebook clone). Consolidation will come both through failure and international companies acquiring China sites. Foreign buyers beware, there are quite a failed foreign investments strewn along China’s information highway.

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