Google allowed into China, at last
China has granted Google permission to enter China. It’s a big deal because it might help alter China’s perceptions of Google as being “foreign,” and of its home-grown Baidu being a default “domestic” favorite. China’s resistance has been a big thorn in Google’s effort to expand there for some time, which we mentioned a while ago here. With Baidu’s plans to go public on a U.S. exchange, the “us-against-them” dynamic won’t be as clear-cut.
Two big questions now: How will Google handle Beijing’s constant censoring efforts, and how will it deal with Baidu, which Google invested in partly to gain access to the China market? Baidu, Yahoo, and Google were the leaders in search traffic last year, with 33.1%, 30.2%, and 20.4% market share, respectively, according to iResearch.
As Interfax China reports:
Market leader Baidu.com is now looking to list on the NASDAQ exchange later this year. Google, moreover, is a minority shareholder in Baidu.com, having made a USD 10 mln strategic investment in the Chinese search engine in June of 2004. Competition between these two companies, however, will not be mollified by Google’s stake in Baidu, Chen Wen, an analyst with CCID, told Interfax. CCID is a research firm under China’s Ministry of Information Industry, the country’s top telecom regulator.
“Google will be Baidu’s main competitor in China,” Chen said. “Baidu has certain advantages in the short term, because Baidu’s Chinese language search services are a lot stronger than Google’s right now. However, in the long term, Google’s Chinese language search services will definitely get stronger and so I expect that there will be some very fierce competition between the two.”
UPDATE: Though see Battelle’s latest post, which suggests the agreement may be weaker than we thought.
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About the Author, Matt Marshall
Matt launched VentureBeat in September of 2006, with the realization that no one else was covering the entrepreneurial and tech innovation scene with the velocity or depth that he was. Prior to founding VentureBeat, he covered venture capital for the San Jose Mercury News from 2001 to 2006. In 2002, Matt was awarded "Journalist of the Year" by the Northern California Society of Professional Journalists. Prior to working at the Merc, he was a correspondent for the Wall Street Journal in Bonn, Germany from 1995 to 1998, and a writer for the Washington Post in 1994. Matt holds a PhD in Government and an MA in German and European Studies from Georgetown University. In addition to VentureBeat, Matt is also the Executive Producer of DEMO, the leading launchpad event for emerging technologies.
