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Google is a Distant Second in China

 
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When you are dealing with a populations as large as China's, even when you take into consideration that three quarters of the population doesn't have internet access, you are still talking about a very large number of those who do. So it's no surprise that Google, Microsoft and Yahoo! want a piece of this rather large and likely growing pie.

So far at least though, it's not one of the big American search engines making the biggest impact in China. According to an article in this month's Forbes Magazine, it's Chinese search engine called Baidu that's a run-away number one.

Baidu is Local

According to the article, Baidu is a local firm started by a US educated entrepreneur by the name of Robin Li. What Li has been able to do is take control of the search market in China by marketing his search engine as a native tool that understands the language and culture better than any American company could. Li has managed to build a Google-like market share in the neighborhood of 65 percent of Chinese searches. Google has about half that, but according to Forbes is growing rapidly and putting pressure on Baidu. (It's worth noting that this PC world article reports that Google is much less successful than Forbes suggests.)

Treading Dangerously in Foreign Markets

While the Chinese market is tantalizing because of its size and potential for Herculean growth, it is also fraught with political and economic danger. The Chinese government has been known to try and control information now and again, and when that happens, Google (and other American search engines) are caught in a very awkward position trying to operate within the rules and customs of the local market, while not appearing to kowtow or cooperate with what many consider to be oppressive regimes.

In a March, 2009 Business Week article, writer Douglas MacMillan underscored this tension when he wrote:

Big Internet companies that do business abroad often find themselves in a quandary. While at home they champion privacy and free speech rights, overseas they often have to play by rules that don't reflect those same freedoms.

It's not always an easy line to walk and American companies torn between supporting freedom and (as Jackson Browne once wrote) "the struggle for the legal tender" often find themselves in a moral pickle.

Worth the Struggle?

Ultimately for these companies, the prize of huge pay-per-click advertising revenue is worth the struggle. Interestingly, the market graph in the Forbes article shows Yahoo, number 3 but fading fast while Microsoft did not even make it on the chart, which suggests they have little presence, or at least not enough to warrant mention. Meanwhile, Li and his firm struggle with their own alleged ethical lapses (as Forbes reports) while Google continues to increase its Chinese presence and puts pressure on the reigning market champion.

This all goes to prove while it's well worth it for businesses, even small businesses, to expand beyond their local markets, it's not always an easy task even when you have the deep pockets of Google. Just because you're Number 1 in the US doesn't mean much when you crash the shores of a market giant like China. But even a small piece of that advertising market could make it worth the effort, and as you might expect, Google is going after it full bore.

 
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It seems as though Google wants to maximize how many people it can reach. Opening their company to the China market is a good idea but is going to be a struggle. Google is going to have change their marketing approach. What generally works in America, usually doesnt exactly translate to any other market, especially China.

SNIP

 
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It has nothing to do with Baidu having better local search results.

Google was late into the market and didn't promote well enough with their market entry strategy. G just thought their international reputation would win the market in China....

Also Chinese are very patriotic and anything 'made in China' will always be used by more Chinese if the benefits are the same.

 
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I don't recall anyone suggesting that Baidu had better local search results. If anything, we agree that it's based more on the fact that it's made by Chinese for Chinese, more than anything else. But as I said, a third of the Chinese search market isn't so bad in the scheme of things.

Thanks for the comment.

Ron

 
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i'm from China, and always use google, don't like baidu. most newbies from china like use baidu prefer to google.

google's tech is great, the level of users and the high censor policy are gogole's obstacle in china

 
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Hi js112:
Thanks so much for the view on the ground in China. It's great to get your perspective and thanks for the comment.

Ron

 
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Well, as far as I know google has indeed do a lot to boost the business in China, such as the music free download and so!

BUt, it still far behind, and Google's leader in China just resign! And I think it is not for the google in China in the futhure!

 
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Very interesting, is their anyother data for Asia such as Indonesia or India?

 
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There is some more up-to-date info from CNNIC here.

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