Google Reportedly Losing Market Share in China
2005-08-30 09:37:00
Google Inc., the dominant search engine in the United States, is loosing market share to rival Baidu.com in China, the second largest Internet market in terms of users, a state news agency reported Tuesday.
Baidu.com, which went public this month on the Nasdaq Stock Exchange, has surpassed Google in the major cities of Beijing, Shanghai and Guangzhou, which account for the vast majority of China's online populaton, reported Xinhuanet.com, which is sponsored by the state news organization Xinhua News Agency.
Quoting figures from the quasi-government China Internet Network Information Centre, the news agency said Baidu has a 43.9 percent share of the Shanghai market, compared with 38.2 percent for Google; 48 percent versus 28.7 percent in Guangzhou and 51.5 percent versus 32.9 percent in Beijing, respectively.
China's online population reached 103 million in June, second only to the United States. However, where annual search-related revenues have reached billions of dollars in the United States, it's forecast to reach $370 million in China by 2007, according to CNNIC. Last year, search revenue reached $86.4 million in China.
Nevertheless, the revenue potential is expected to grow as China's economy improves. Yahoo Inc. this month said it would pay $1 billion for a 40 percent share of Chinese e-commerce and search company Alibaba.com. In addition, Yahoo agreed to fold its China operations into the joint Internet company.
Microsoft Corp. is getting ready to launch a Chinese version of its MSN portal through a joint venture with Shanghai Alliance Investment Ltd.
Google formally entered the Chinese market in July, but has failed to build brand awareness, the state news agency said. About half of the consumers surveyed by the CNNIC misspelled Google.
Failing to build a strong brand in China could hurt Google, given that unlike U.S. consumers, the majority of Chinese use only one or two search engines when looking for something on the Internet, the news agency reported. Fully 75 percent of Chinese use no more than two search engines.
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