More Chinese Companies on Fortune 500 List Than Ever

The number of U.S. companies listed is at its lowest since the magazine began its list in 1995

In its latest annual ranking of the world’s largest companies by revenue, Fortune Magazine this year listed 34 Chinese companies and 140 U.S. companies. While China set a new record, increasing its total from 25 last year, the U.S. set a new record of its own with 140 companies, the lowest number since Fortune started its list in 1995.

Now, American companies still handily dominate any other country by far but this year’s ranking continues a noteworthy trend: China is catching up on America in the world of business! And in case you were wondering, India and its 1.1 billion people are probably going to come knocking next.

Perhaps what is most alarming about the recent growth spurt of Chinese companies is the fact that western businesses that fare very well at home are far from dominating their respective industry sectors in China. Companies like Google, for example, which owns about 65 percent of the search market in the U.S., is dwarfed by Baidu in China, which owns 62 percent of the search market. Interestingly, while English remains the most-used language on the Internet with 427 million websurfers worldwide, Chinese (Mandarin) comes in second at 233 million.

Google is not the only western company that struggles in China. The likes of eBay, Amazon, AT&T and many others all lag behind their Chinese competitors. This is due to a number of reasons, including China's protectionist policies, which I shall discuss in my next blog entry.

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Small Texas Newspaper Charges for Content

Stop the presses: The Associated Press recently reported that the Valley Morning Star, a small newspaper in South Texas, this week would start charging for access to its website, explaining that the days of giving away content for free are over.

Does anyone think this will work?

While I praise the paper for its gutsy move, I’m curious to see if anyone would actually be willing to pay for content, other than the people who will have automatic access as a virtue of already being a subscriber to the paper.
The business model for newspapers has been flawed ever since the Internet made it possible for users to post free ads online in a more effective way (i.e. faster, more extensively and for free) than newspapers. Charging for content is not what will make newspapers profitable.

So, what business model would make papers profitable? Stopping the presses, as the first sentence of this piece suggests, might help. The high cost of printing and distributing newspapers makes it today very difficult to make money given the reduced amount of ads placed in papers. So far, only the Wall Street Journal and a handful of publications with specialized content (trade publications) have been able to successfully charge for content.

While it can be argued that the Valley Morning Star’s local content makes it “specialized” to the community, I doubt that users would pay enough in aggregate to make the paper profitable unless it stops printing.

Critics will argue that I am putting down attempts from a company at changing the status quo (which I admire) without providing an alternative solution. The reason I’m not providing an alternative solution is that I don’t believe there is one for print newspapers. In a not-too-distant future, most content will be online and as long as hordes of bloggers continue to publish free content, it will be expected to remain free.

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