A look at the business model of successful local Chinese IT companies, from CNET News:

Forget Silicon Valley–if you want to see a place enthralled with Web 2.0, come to China.

A rising middle class, cheap start-up costs, increasing penetration of PCs and Internet-enabled cell phones, and an ability to tap the local market better than multinationals like Google or Amazon.com, among other factors, is fueling a rush into Web sites, online games and companies with novel advertising pitches.

Margins are tight and competition is intense, but there’s a huge payout for the winners. [Full Text]