China Mobile's token search deal

Metaratings
16 Aug 2010
00:00
Article

Just how serious is China Mobile about building a search engine with Xinhua?

Clearly, last Thursday’s joint announcement with the state news and propaganda arm is politically-driven.

But it’s hard to see that the vague “framework agreement” is anything more than token.

No dollars are committed to the “Search Engine New Media International Communications Co” venture, nor any timetable. Neither company has any search capabilities, nor any apparent plans to obtain them.

In wake of the Google debacle, the Chinese government is looking for partners who can help maintain the Great Firewall. As Xinhua itself said, the project is aimed at helping the government “safeguard its information security and push forward the robust, healthy and orderly development of China's new media industry.”

It’s not the first state-backed effort at search. Quaero, the French challenge to Google, has sunk without trace.

It’s not even the first Chinese government effort. People’s Daily, the official Communist Party mouthpiece, has been offering its own search engine, GoSo, since June.

The announcement did not register on the Nasdaq share price of Baidu, which has 70% of the China search market, on Friday.

Of course, mobile search is not a big deal in China just yet, which has less than 100 million 3G users.

But it is a critical app for monetizing mobile data, which is why it’s hard to see China Mobile ceding its search box to the government.

China Mobile has shed large chunks of shareholder value in subsidizing TD-SCDMA. Chairman Wang Jianzhou – who was absent from last week’s signing ceremony – may feel this is one favor he doesn’t owe.

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