High School students in Palo Alto, Calif., spend more time using digital media daily than their counterparts in Beijing, but the Chinese youths are more likely to build networks online only according to a new study from Stanford University.

STANFORD GRADUATE SCHOOL OF BUSINESS — Who is more digitally switched on – high school students in Silicon Valley or Beijing?

A new study from Stanford University provides some clues. High schoolers in Palo Alto, Calif., in the heart of Silicon Valley, spend significantly more time using digital media every day than their peers at leading high schools in the Chinese capital. However, Chinese students sometimes outpace their American counterparts in embracing the latest internet technologies and building a network of online friends they have never met in person.

The Stanford Program on Regions of Innovation and Entrepreneurship (SPRIE), part of the university's Graduate School of Business, looked into the digital lives of teens in Silicon Valley and China's capital. Seventy-one high schoolers, 44 from Palo Alto and 27 from Beijing, were surveyed online earlier this month. The students, between the ages of 16 and 18, were asked about their usage of different types of consumer electronics and communications, including how much time they spent daily on a range of online activities.

While the California teens spent significantly more time than their Beijing peers using social networking sites and blogging, Beijing students spent considerably more time watching films and videos over the internet, hardly watching television at all. The Beijing teens were much more likely to have online-only friends, and more of them (44% versus 16%) touted Apple's iPad tablets than the Palo Alto respondents.

The study suggested the emergence of a "digital tribe" of teens transcending cultures and geographic borders, especially in tech hotspots such as Silicon Valley and Beijing. "In certain urban locations, today's teens are native 'netizens'," said Marguerite Gong Hancock, associate director of SPRIE. "Most teens in our survey in both Palo Alto and Beijing have had mobile phones since the age of 12. They lead a large part of their daily lives online."

The survey and other research into patterns of entrepreneurship and venture capital investment was discussed September 30 at a Stanford conference addressing the rise of the internet in China. The gathering, China 2.0: Transforming Media and Commerce organized by SPRIE, included speakers from leading internet companies in China, entrepreneurs, and venture capital investors.

In advance of the conference, SPRIE polled the high school students with the assistance of Beijing-based Danwei.org, a Beijing research and information firm. Most of the American teens attend Palo Alto High School, while most of the Beijing students go to People's University Annex High School. Forty-one females and 30 males participated.

SPRIE researchers wanted to get a snapshot of the digital lifestyle of young urban Chinese expected to shape China's technology future. "These are the influencers and early adopters," said Hancock.

China's internet population of about 485 million has already surpassed the approximately 250 million users in the United States. "Understanding the habits of the next generation of Chinese netizens is increasingly important to investors and new media companies. The 'born after 1990' generation in China will play a role in influencing global adoption of new technologies and business models" said Duncan Clark, chairman of consulting firm BDA China, and senior advisor of the China 2.0 project at SPRIE.

There were major similarities between Palo Alto and Beijing students. On weekdays, the top online activity for both was doing schoolwork, followed by using social networking sites and downloading and listening to music. On weekends among the Beijing students, schoolwork remained the leading activity, followed by social networking and web surfing. On weekends in Silicon Valley, students spent the most time on social networking sites, followed by schoolwork and music. In both countries, the teens overwhelmingly favored texting to communicate with friends, although the Beijing teens were less likely to text their parents than the Palo Alto group.

Overall, the U.S. teens spent significantly more time than their Chinese counterparts on almost all types of internet activities. The Palo Alto students spent roughly twice as long (two hours a day) on social networking sites. By contrast, the Beijing teens were much more likely to watch videos and films online.

The study suggested that teens in China rely more heavily on the internet as an emotional and social outlet. In Beijing, more than 90% of respondents said they have friends they know only over the internet. That compared with 29% in Palo Alto. "China's post-'90s single-child generation faces limited play time and heavy academic pressures. The internet enables teens to live out a whole other life online," said Clark.

Jack Ma, chairman of China's Alibaba internet giant, told a Stanford audience his firm is "very interested" in acquiring Yahoo. Ma was one of the speakers at the "China 2.0" conference organized by the Stanford Program on Regions of Innovation and Entrepreneurship on Sept. 30.

STANFORD GRADUATE SCHOOL OF BUSINESS – In a wide-ranging talk, Jack Ma, chairman of China's Alibaba Group, publicly declared his interest in acquiring troubled U.S. internet giant Yahoo, while also reflecting on his 12-year journey building an internet powerhouse that has transformed commerce for small businesses and consumers in China.

The Chinese e-commerce billionaire addressed a Sept. 30 conference at the Stanford Graduate School of Business on the rise of China's internet. The gathering, China 2.0: Transforming Media and Commerce was organized by the Stanford Program on Regions of Innovation and Entrepreneurship (SPRIE). With more than 600 registered participants, the event featured talks by leading Chinese internet entrepreneurs and venture capitalists active in Asia as well as a look at ongoing Stanford research on venture investment patterns and networks in China.

Speaking without prepared notes, Ma revealed that he plans to spend the coming year in the United States. "After 12 years, I need some time to rest. This year has been so difficult for me. I'm now coming out for a year," said the Alibaba chief, whose company is based in Hangzhou, China.

Ma was asked if he wanted to acquire Yahoo, the struggling U.S. internet pioneer that owns 40% of Alibaba. "Yes. We're very interested in that. We're very interested in Yahoo because our Alibaba Group is so important to Yahoo and Yahoo is important to us. We are interested in the whole piece of Yahoo," he said, adding that Alibaba also has talked with other prospective buyers. However, a deal would be very "complicated," Ma cautioned. "I cross my fingers and say that we are very, very interested in that."

Alibaba's takeover of Yahoo would represent something of a role reversal, symbolizing how much China's internet—and to some degree, its economy—has eclipsed that of the United States'. In 2005, Ma sold a 40% stake in the fledgling Alibaba to Yahoo in exchange for $1 billion and control of Yahoo China. The Alibaba-Yahoo relationship has been strained in recent years and Ma has telegraphed his desire to reduce or buy back Yahoo's stake. "We appreciate yesterday, but are looking for a better tomorrow," Ma told the Stanford audience.

He described Jerry Yang, co-founder and board member of Yahoo, as "a good personal friend." Ma added, "Without the Yahoo investment, we wouldn't be that successful today. Yahoo is one of three companies that woke me up to the internet. Without the internet, there would be no Alibaba and no Jack Ma."

Ma downplayed recent investor concerns that Chinese regulators will clamp down on the "variable interest entity" (VIE), a vehicle that has allowed foreigners to indirectly invest in Chinese internet companies and for those firms to go public in overseas stock markets. "The VIE is a great innovation," but "we've got to make the VIE really transparent," said Ma. "I don't see that the government is going to shut it down," he added.

Ma reflected on some of his successes and failures since founding Alibaba in 1999 as an online venue for small Chinese firms to connect with overseas buyers. Visiting Silicon Valley that year, "I was rejected by so many venture capitalists. [But] I went back to China with the American Dream," he recalled.

Today, the Alibaba Group, with 23,000 employees, dominates e-commerce in China, largely through its Hong Kong-listed Alibaba.com business-to-business site, Taobao consumer-to-consumer marketplace, and Taobao Mall, a business-to-consumer site for branded items. Ma said his e-commerce enterprises have helped China's small businesses succeed and made Chinese consumers smarter about purchase decisions. "We feel proud because we're changing China," he said.

The conference took place shortly after Beijing announced that China's internet population has surpassed 500 million—about double the number in the United States. Two of the five biggest internet firms in the world, by market value, are from China. U.S. pioneers, including Yahoo, eBay, Google, and Facebook, have failed to make significant inroads in China, where the government exercises strong control over the internet and foreign ownership. In contrast, Chinese internet firms have grown rapidly, coming up with technological and business innovations for their domestic market, and seeking investors, technical know-how, and talent overseas.

"They are growing very quickly and have global aspirations. The days of thinking that's just an eBay copy is an old mindset," said Marguerite Gong Hancock, associate director of SPRIE. "The arrows are now pointing in both directions."

In a brief appearance, Stanford President John Hennessy told the audience that China and the internet "are the two most exciting things happening in the world." There are more than 1,000 students from China at Stanford, by far the largest from a single foreign country, he added.

Conference-goers heard from Joe Chen, MBA '99, founder and chief executive of Renren Inc., a social networking site popular among Chinese university students. Discussing the emergence of the social web in China, he described his company as positioned on the "bleeding edge of SoLoMo," describing the intersection of social, local, and mobile technologies coined by venture capitalist John Doerr. Chen suggested that social networking (based on relationships) has emerged as an alternative to online search (based on keywords) for obtaining and sharing information. Social networking will transform commerce, entertainment, content distribution, and communications, just as online search did, he predicted.

China's social networking and media companies have developed their own innovations, sometimes ahead of U.S. companies, said Chen.The world's first social networking farming game, for instance, was launched on Renren in 2008. Renren went public on the New York Stock Exchange in May, beating Facebook to the IPO trough.

Conference organizers described SPRIE research into venture capital investments and networks in China. Researchers analyzed data on more than 2,000 Chinese companies, nearly 800 investment firms, and more than 600 individuals, including their university and company affiliations. Using the data, they created visualizations—circular nodes with lines extending out in a web—of the relationships among companies, investors, and entrepreneurs. "This is the power of network analysis," said Hancock, showing onscreen a moving image of how China's "investment constellation" changed from 1996 to 2011. The densest venture clusters are in Beijing, Shanghai, and Shenzhen. The research identified more than 40 venture capitalists involved in China who have ties to Stanford, she said.

Venture capitalists discussed the landscape for funding internet startups that are proliferating in China. "Early stage is still quite bubblish," said Tim Chang, MBA '01, managing director of the Mayfield Fund. "There's a lot of hot money doing drive-by due diligence."

Entrepreneurs described a frenetic, hyper-competitive environment for startups. "It's brutal. There are periods I cannot sleep for a month because of the massive pressures," said Fritz Demopoulos, co-founder of Qunar.com, China's largest travel web site, which recently sold a majority stake to Chinese search giant Baidu. But "there's still so much room to grow," said Demopoulos. "The runway in China is long."