Google the Underdog in China, But Will Never Leave the Country

By Tech Wire Asia | 28 January, 2012

Google’s business in China is growing and “continues to thrive,” and officials in the region have denied that the company is abandoning operations in China.

In this March 25, 2010 file photo, a Chinese flag flaps in the wind in front of the Google China headquarters in Beijing. A year after a public spat with Beijing over censorship, Google Inc. says its business with Chinese advertisers is growing even as the Internet giant's share of online searches in China plunges. A major Chinese portal announced last week it would no longer use Google for search, compounding its rapid loss of market share since March last year when it closed its local search engine. (AP)

Daniel Alegre, Google President of Asia-Pacific Sales, Business Development and Operations, says the company is currently focusing on meeting the demand for advertising services. “It’s a very vibrant Internet market. We have some of the best employees at Google and we continue to grow not only our revenue but also our headcount in the country,” he added in an interview with Bloomberg Television.

With nearly 16% user share (and decreasing annually), Google is the uncharacteristic underdog in the country. Google actually ranks second in the search engine market in the country after Baidu, which is considered the Google of China with a 78% share of the search market

Google’s presence in China started seven years ago, marked by a Chinese-language interface developed for Google.com, and originally led by a Carnegie Mellon PhD computer scientist Kai-Fu Lee. The company has experienced controversies due to government censorship policies on their search results, as well as their other online services. In 2006, China-based Google.cn search page with results subject to censorship by the government was launched.

Since Google has a strict policy against storing personal data inside China, a number of their key services for local users such as Gmail, Picasa and Blogger are not being offered in the country. Meanwhile other services had to be drastically altered.

In 2009 access to YouTube and other Google services was blocked, which resulted in Google deciding to redirect all search queries from Google.cn to Google.com.hk (Google Hong Kong) a year later in March. This act effectively bypassed Chinese regulators, and allowed Simplified Chinese search results uncensored, with Hong Kong being an independent jurisdiction and not subject to Chinese information and censorship laws.

For now, Google still sees China as the country with the biggest population of internet users, and obviously wants a larger slice of the pie. With the trend of openness, Google might expect China’s next generation to be more progressive, which might be enough to enable Google to establish a foothold in the country in a few years’ time.