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China has embraced the Internet. As of December 2004, 94 million people had gone online, making China the second largest Internet-user market in the world, behind only the U.S., according to the China Internet Network Information Center (CNNIC), which has carried out 15 semiannual surveys of Internet users in China since 1997.1The growth trajectory of the country's Internet use appears to follow the common S-curve of technology adoption seen around the world (see Figure 1). The collapse of the worldwide Internet bubble in 2000 and 2001 slowed diffusion only momentarily. The rate of growth accelerated again in 2002 and 2003, driven by a few leading applications, including online chat, online games, and the Web-based short message service (SMS).