Advertising, virtual goods & the internet – a lesson from China?

I read an interesting and robust debate this weekend about the future of advertising on the Internet. One thing it did prove is that academics love a good argument. A key point of Professor Eric Clemons made was that he believed that advertising would constitute less than 20% of internet business revenues in 5 years.  This was derided by most of the commentators.

Looks like he might have a point that is valid today – at least in China:

According to

“China’s TenCent social network recently announced it’s Q4 earnings for 2008. Total revenues came in at over $1 billion, marking an 87% increase from 2007. According to the company, $719 million came from virtual goods on the web, $204 million from mobile virtual goods, and $120 million from ad revenue.”

The rest of their numbers are fairly staggering too. Check out the full article here.