Chinese Online Population Now Equals US (MSFT)(BIDU)(SINA)(GOOG)(YHOO)

Based on estimates from the Chinese government, the most populated country in the world now has 221 million people online. That puts it even with the US. Of course, the market is growing faster in China, so it should pull wall ahead of America by the end of the year.

The news is important for US internet companies. Google (GOOG), Yahoo! (YHOO) and MSN (MSFT) cannot count on their domestic market to produce a bigger pie each year. They are going to have to fight over what is on the American table. The promise of China is that it has 1.3 billion people. Many will never make it online, but a lot of them will.

Standing in the way of the American search companies and portals are the locals which include companies like Baidu (BIDU) and Sina (SINA). Baidu has 60% of the search engine share in China. The incumbents are not going to give ground easily. That is very tough news for firms like Yahoo! which are going to have to look outside the US for their future growth.

The good news is that the Chinese internet population is getting much bigger. The bad news is that the online audience may not want US products.

NIH. Not invented here.

Douglas A. McIntyre