China’s Internet security market overheats

China’s Internet security industry has become overheated as more Internet companies enter the sector. Experts suggested that a new profit model could emerge very soon as companies such as Baidu Inc and Tencent Holdings Ltd announce plans to participate in the market.

"The number of security threats targeting personal computers is declining, but the number of anti-virus providers has been growing rapidly over the years,” said Chen Yong, vice-president of Kingsoft Security, one of the nation’s earliest anti-virus software developers.

Looking forward, more threats could target mobile devices, such as smartphones and tablets, rather than personal computers, said Chen.

The nation’s Internet giants, including Baidu and Tencent, said earlier this year that they will “actively” work with Internet security developers such as Kingsoft to give better service to customers.

But industry insiders said that their vigorous participation was triggered by an intense race with Qihoo 360 Technology Co Ltd, a relatively small Internet firm that poses threats in Baidu and Tencent’s most profitable areas.

"In the early stages, every player in the industry will adopt the free-to-use model because they need to expand user numbers to survive,” said Jesse Song, vice-president of Westcoast Labs Greater China, an independent test facility of information security products.

But the landscape has changed since large Web corporations entered the market, according to Song. More Chinese users will choose to pay for anti-virus software in order to have advertisement-free versions, and this could further heat up the competition, he predicted.