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China's Internet heros gather to discuss future

HANGZHOU, China — Even before China's annual "Internet summit" got under way here, Charles Zhang, the stylish founder of the Web portal, was holding court in the lobby of the Hyatt Hotel, standing before a crush of reporters and television cameras.

Soon after, two other Chinese Internet superstars, William Ding, the 34-year-old chief executive of, and Ma Huateng, also 34, the founder of, made their way toward the hotel's grand ballroom, pursued like a pair of rock stars.

Jack Ma, the founder of and the host of this one-day conference, said that the night before he had turned 40. His dinner guests that evening were Jerry Yang, the co-founder of Yahoo, and Bill Clinton, who was scheduled to address the Internet forum.

In a country where Internet use is exploding and another Bill — Bill Gates — is widely admired, about 600 people packed a Hyatt ballroom on a Saturday afternoon to listen to some of the nation's young Internet millionaires talk about the future.

"These are the Internet legends of China," said Ho Ben, 28, a participant at the conference and the general manager of a toy company that sources online goods through, China's largest business-to-business Web site. "I'm a great admirer of these guys, not only because they've made our lives different but because they've made our business much easier."

Ma — the architect of China's biggest Internet deal this year, a partnership with Yahoo — convened this annual gathering of some of China's largest Internet companies to discuss the state of the business.

This year, it seems, China's small cadre of Internet moguls has many reasons to celebrate. America's largest Internet companies and venture capital firms are now flocking to invest here.

The biggest deal came early last month, when Yahoo agreed to invest $1 billion in the 6-year-old As part of the deal, Yahoo even agreed to hand over its Yahoo China operations to Ma, who is considered one of China's Internet pioneers.

Last month also brought the spectacular Nasdaq debut of, China's biggest search engine company. Its shares soared on their first day of trading in one of the most successful initial public stock offerings since the end of the Internet bubble in 2000 and 2001.

EBay has also made big moves, acquiring China's biggest online auction company,, and promising to invest $100 million in China this year.

Much of the excitement has been ignited by reports that there are now more than 100 million Internet users here, ranking China second only to the United States.

And with Internet use growing at a phenomenal pace, up from about 2 million users in 1998, venture capital firms are descending upon China, hoping to find the next Yahoo, Google or eBay.

This year's summit, however, was partly overshadowed by reports last week that Yahoo had provided information that helped authorities in China sentence a Chinese journalist to 10 years in prison for leaking "state secrets" to a foreign Web site.

Yang, Yahoo's co-founder, declined to discuss details of the case, in which the 37-year-old journalist sent anonymous e-mail messages to a Web site based in America, according to court documents. But Yang said that Yahoo had no alternative other than to comply with Chinese law.

"I don't like the outcomes of what happens with these things, but we have to comply with the law," he said during the conference.

Concerns persist about whether the major Western Internet companies help Chinese authorities monitor and censor content on their Web sites, and even whether they help the authorities crack down on dissent or imprison political opponents.

But the conference did little to shed light on that issue. Attendees were more interested in talking about new profit strategies and even some social issues, like whether Chinese youths were becoming addicted to online games.

Several participants, including Ding, once listed as China's richest man, said they were cooperating with the government to combat online game addiction.

In the spirit of a conference that had questioners often referring to the speakers as "Internet heroes," the mother of the game-playing child also had a question: "When are you going to get married?"

While most of the big Internet players in China showed up for the summit, including Wang Yan, the head of, one of the major portals, the absence of executives from eBay and Baidu was conspicuous but hardly surprising. EBay is facing stiff competition in China from, a subsidiary of Alibaba. Baidu, in which Google has a small stake, is considered a strong challenger to the new Alibaba-Yahoo partnership. And Microsoft is now battling Google in a Washington court, accusing one of its former Chinese executives of violating a noncompete clause by joining rival Google earlier this year.

Still, Ma said all the major players had been invited to attend his summit in the spirit of "peaceful" discussion.

The flamboyant Ma, who stands just over 5 feet, is one of China's oldest Internet moguls. He is also one of the richest. After his deal with Yahoo, privately held is now valued at about $4.2 billion, making it China's most valuable Internet company. Ma, a former English teacher, is also skilled at attracting publicity for Alibaba, which is based in Hangzhou.

The event, held in the beautiful West Lake area, attracted widespread press coverage in China, besides scores of bankers, dealmakers, movie producers and Internet bandwagon followers. During the intermission, cameramen and eager fans raced after speakers, several of whom chose to scamper into the bathroom for cover.

But onstage, China's Internet entrepreneurs acknowledged that they were facing plenty of hurdles in making their companies profitable and successful.

They said that competition was intense and that online payments systems were problematic. But they also said their companies had matured during the last few years, when fierce rivalries had evolved into heated accusations and even legal battles over intellectual property.

"Four years ago, we were naive. There was fierce fighting," said Ma of Alibaba. "Now all of us are survivors. We are more calm-minded."