The latest company to take the market by storm is the Hong Kong-based China.com, which saw its shares more than treble in value on the first day of trading this week.

Shares opened on the Nasdaq exchange at $20 and rose to $67. China.com raised $84m, much more than expected.

Founded five years ago, China.com has about 400,000 subscribers, mostly in Hong Kong. It is an Internet service provider which offers Chinese language content on its Websites.

Its opening day success is interesting, partly because last year it posted a loss of $8.5m. That is not uncommon for Internet stocks, but China.com is not even the market leader. In some surveys, it does not even make the top 20 as a player in mainland China.

Well-known backers

But the company does have some strong backers. America Online holds a 10% stake, and other shareholders include Beijing's official news agency Xinhua, Sun Microsystems and Bechtel of Germany.

Ultimately, the key factor that will determine the success of such stocks is the growth of the Internet in China.

Traditional in many ways, China is rapidly embracing the Internet

There are currently four million users, according to official statistics released on Wednesday, but that is twice as many as six months ago.

And the government expects that by next year, the figure could have risen to 10 million.

In fact, the Chinese authorities are leading the way in getting their nation wired. By the year 2000, 60% of government departments will have Websites.

Surfers can check out anything from the Ministry of Railways to the State Tobacco Monopoly Bureau.

'Must be a mainland hit'

The potential is definitely there, hence the interest in China.com. "There's clearly a lot of demand for a stock that provides both the Internet and Asia and here's something that does," says Rajeev Gupta, an Asian Internet specialist at Goldman Sachs.

But he believes China.com must work to customise its content to attract more mainland users.

"It's about stickiness, getting your users there and keeping them there," he says.

China.com has the advantage of going to the market first - and of having a cool name - but the competition is fierce.

Sohu could be the next company to float

Sohu.com, a Chinese language portal site, is thinking of bringing forward its plans for a Nasdaq float to next year.

It gets more than two million page views a day, compared with estimates as low as 100,000 for China.com.

Other competitors include Netease, Sina.com and the Chinese version of Yahoo! But while most are aiming for an audience including Hong Kong and Taiwan, Sohu wants to focus on the mainland.

"The Internet is culturally dependent", says the company's boss, Charles Zhang. "It's not just a software industry, it's a cultural industry."

Sohu - the name is Chinese for "search fox" - has switched to a domestic software firm that will help find words Chinese users are looking for.

"We're targeting people who either don't have any computer background or they're just too busy," said Mr Zhang.

Young, male and single

And that target audience is enormous, because government figures show China's Internet users currently fall into a very narrow social group.

Two-thirds are aged between 20 and 30, most are male and the majority are single. Three-quarters have attended or are in higher education.

But they have caught the bug in no uncertain terms. Despite limited incomes, many users are staying connected for longer - 41% spend more than 10 hours a week on the Net.

Sohu took the gamble of expanding last year and made a loss, but Mr Zhang is not perturbed. He knows that loose regulation and the odd crackdown on site content make it a risky business.

"Sohu is a flagship of China's Internet industry," he said. "It is in the government's interest for it to succeed."