Why China’s search engine market is so attractive to Google

OUTSIDE of China, when you think of searching for something, you think of Google. Not only has it become a household name over the past decade or so, Google’s search engine processes billions of search queries everyday.

According to statcounter, 93.59 percent of mobile search traffic and 86.02 percent of desktop search traffic from across the world originate from Google.

However, when it comes to China, Baidu is a monopolistic winner in the search engine market.

The reason search engines are valuable is simple: businesses pay top dollar to advertise on them, bidding for keywords and calculating returns in terms of traffic generated against the cost per click or the cost per impression of their search advertisement.

In China, there are 648.75 million internet users, of whom, 80.5 percent use search engines. The country also has 578 million mobile internet users, 77.1 percent of whom use search to surf the internet. According to a report by Hylink, 92.8 percent of Chinese netizens connect to the internet via Baidu.

iResearch China estimates that the total search advertising revenues earned by Chinese search engines in 2017 was CNY 93.7 billion (US$13.75 billion), which it expects to see reach CNY 113.4 billion (US$16.64) in 2018, CNY 134.7 billion (US$ 19.77 billion) in 2019, and CNY 156.7 billion (US$22.99 billion) in 2020.

And it’s exactly when we speak about the advertising revenues and size of the Chinese market that Google’s interest in China becomes clear.

The company has a great product and it wants to establish itself in the market. In order to do that, however, it seems that Google is willing to make a small compromise in terms of how it operates.

According to a recent report by Reuters, the company is planning a censored version of its search engine for China that will block websites and certain search terms.

Reuters revealed that the project is code-named “Dragonfly” and has been underway since the spring of 2017.

It seems as though search terms about human rights, democracy, religion and peaceful protests will be among the words blacklisted in the search engine app, but the finalized version could be launched in the next six to nine months, pending approval from Chinese officials.

The fact is, if Google is able to enter the Chinese market, it will open doors to a wide variety of possibilities for the company and the economy in China. If things move in the right direction, the coming months could be exciting for the global search engine giant.

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