Google stays, Yahoo shrinks, Baidu leads

28 Jan 2008

Hold the front page: Google is not abandoning the China market.

Google increased its share of the China search market in Q4 by 2.2 points at the expense of both Baidu and Yahoo, according to Analysys International. Google remains in second place with 25.9% of the market, well behind Baidu on 60.1% but solidly ahead of Yahoo China on 9.6%.

Google's China chief Li Kaifu told a press function last week the search company had "full confidence" in the China market and would not abandon it.

It's the kind of chestnut that falls from the lips of a CEO any day, but this one made headlines in the IT press.

The fact that it was given any prominence at all reminds of the constant critical speculation that has surrounded Google in China. Even now, there are some who say it has "failed" in the mainland market, and rumors frequently circulate about Li's resignation.

Yet in just three years Google has snared a quarter of the search business against a runaway market leader. One blind test last year showed its search engine actually worked better than Baidu's in Chinese.

And while the market share figure is healthy, the number to watch in search is the growth in revenue for the entire search sector; it doubled to 947 million yuan in the last quarter.

Meanwhile, it's Yahoo China that is making the real headlines. It last week trimmed more than 100 staff, part of a global cutback program to boost its sagging stock price. But it is also abandoning the ordinary search market in China and transferring its staff and technology to affiliate Alibaba.

Yahoo has set up a new structure that, notes a Sina report, sidelines its vice-president and search head Yvonne Zhang. Not so long ago she said the company aimed to be in the first rank of Chinese search firms within three years. Not now.

In any case, the fact that the big three have 95% of the market isn't deterring new entrants. Eyeing the soaring growth, Netease founder Ding Lei is also giving the search market serious thought. But he and everyone else will have to fight for what Baidu and Google leave behind.

Related content

No Comments Yet! Be the first to share what you think!