With blogging and social networking being two of their biggest selling points, Web 2.0 sites continue to become more popular.

And whether the momentum of 2007 carries the success of such websites throughout this year is of great interest to billions of Web crawlers.

Web 2.0 sites typically allow visitors to edit content. And they are often trusted as co-developers, using their collective intelligence to make the sites more popular.

While such sites are extremely popular in Hong Kong, not many popular ones have been created here. Blame the region's relatively small size for that, as the most popular Web 2.0 sites come from the US and the mainland, which boast considerably larger populations.

On the mainland, for instance, quite a few Web 2.0 sites are competing for Internet traffic with long-running portals. Among them are video-sharing sites, 6rooms.com and tudou.com; social-networking sites, 51.com and xiaonei.com; blogging platforms blogchina.com and bokee.com; and the popular mop.com, which hosts many Web 2.0 applications.

In Hong Kong, however, many residents may be hard-pressed to name a locally created Web 2.0 site.

According to the China Internet Network Information Center, the web-surfing population on the mainland reached 162 million by June 30, 2007, and it is increasing by 100 per minute. The total ranks behind only the US's, although the penetration rate on the mainland is a poor 12.3 percent.

The percentage of Internet users in Hong Kong (68.2 percent) is comparable to that in the US (69.7 percent), according to Nielson Online. So, with 4.8 million Internet users, the Hong Kong market is not in the same league as the mainland's.

Market size is a key element to the success of Web 2.0, said Fang Xingdong, CEO of the mainland-based bokee.com.

"The biggest Web 2.0 websites in the world are based on the nearly 1 billion English-speaking Internet users. The explosive growth of YouTube.com, MySpace.com and Facebook.com all occurred after the number of subscribers got into the tens of million."

Fang illustrated his point by contrasting the US-made Facebook.com with Cyworld.com in South Korea and Mixi.jp in Japan, both pioneers in social networking softwares. They were popularized earlier than Facebook, but their growth rate peaked, as they were unable to achieve the status of a global brand.

The Web 2.0 users in Hong Kong are quick to adopt foreign websites, observed Ringo Lam, founding president of the Internet Professional Association.

For instance, when Hongkongers share videos, they go to YouTube; if they blog, they write on Xanga; when they want to socialize online, they create profiles on Facebook.

Even teenagers who don't speak English that well flock to the well-known websites "because everybody else is there," said Francis Kwok, CEO of Radica System and the chairman of Hong Kong's eMarketing Strategic Alliance. "The core of Web 2.0 is community. The bigger the community, the stronger the attraction."

Hongkongers' connection to the outside world is also factors into the dominance of international sites. Citing the Facebook rage in Hong Kong as an example, Kwok said that most people became a member after receiving invitations from a "foreign friend". "For a Hongkonger, two or three of his friends are probably 'foreign' - those who are studying overseas, have emigrated, or are simply not Chinese," he said.

The swift invasion of cyberspace by global players means local websites are having a hard time finding their niche.

Mainland Internet ventures can borrow an existing concept in the US, develop a localized version of it, and deliver it to the local market before the similar American service established its presence. Hong Kong companies could not afford to wait, Kwok said.

He drew an analogy between Web 2.0 and the instant-messaging host, ICQ. Mainland company Tencent didn't introduce its imitation of ICQ, called QQ, until 1998, two years after the release of ICQ. In that case, the delay didn't matter, because a vast number of computer newbies were learning to chat online for the first time.

Tencent has since made QQ a cultural phenomenon, boasting 290 million active accounts and a Web empire featuring news and gaming for its online community.

"Could Hong Kong have developed its own 'ICQ' like this? I don't think so," Kwok said.

No lack of innovation

All efforts in Hong Kong haven't been in vain, as the city does have its share of Web 2.0 successes. Online-spreadsheet host editgrid.com, social networking site Zorpia.com and book community Anobii.com, for example, all have solid market shares. The irony is they are better known outside their hometown.

Those three Hong Kong-based Web 2.0 sites all target overseas' markets. "They have to," said Lam, noting that there's little room to grow locally.

But the biggest weakness of a small market could be turned into an advantage, Lam said.

While Web 2.0 developers on the mainland rarely think outside the border, their Hong Kong counterparts are forced to keep an international perspective. "In a sense, the market for Hong Kong websites is bigger," he said.

Having built Internet ventures both in Hong Kong and on the mainland, Lam said that Hong Kong has at least two favorable conditions.

Firstly, the IPR protection is better. Mainland companies have to make a considerable effort in guarding new technologies, while Hong Kong firms can concentrate on innovation.

Secondly, it's easier for Hong Kong Internet ventures to sell technology and reap fruits of their labor because of the closer ties to the multinational users. On the mainland, there's little chance for cooperation.

"There's little acquisition or merger activity. When a successful idea emerges, the competing websites imitate and develop their own versions. It's a tough for smaller companies," Lam said.

The hope for Web 2.0 enterprises in Hong Kong is niches not already tapped by major players.

The Middle East, which has a large online population but hasn't caught the eye of Western Internet powerhouses, is a promising market.

There are also the "vertical markets" of specific and specialized needs. Fashion-themed Web 2.0 sites, for example, could steal a share from magazines because the user-generated content is seen as more objective and updated, Kwok said.

Building applications on existing Web 2.0 platforms is also a feasible business direction. Kwok's company is in talks with a furniture chain to develop an application that enable users to furnish a model of their houses on Facebook.

The Web 2.0 suits Hongkongers, who are "fast and flexible", Hong Kong Internet specialist Belle Liu wrote on her blog.

It's not hard to turn a good idea into a viable business, but it's naive to not expect windfalls in a mature market like Hong Kong. "It takes ardor to persist in this trade," she said. "If eventually you really get rich, it's just a wonderful by-product."

(HK Edition 01/23/2008 page4)