Interesting
NY Times profile of Baidu, China's main search
engine and currently the 4th biggest website in the world. It has a market value of $3
billion, but "some analysts" question whether Baidu can keep out competition from Google
and Yahoo:
"While Baidu continues to gain market share in China — and does so with a Web site that the Chinese government heavily censors and that gives priority to advertising rather than relevant search results — some analysts question whether Baidu can withstand competition from Google and Yahoo, which possess superior technology and global work forces."
I actually think the question is the wrong way round - it should be: can Google and Yahoo withstand competition from Baidu, in China?
While I'm not able to judge whether Baidu's technology is inferior to Google and Yahoo's - although I'd love some comments on this from techies who are familiar with Baidu - I think Western companies (even Google) will be hard-pressed to compete against Baidu in China. In our Top Web Apps in China post, we noted that government regulations, language and cultural barriers are all difficult for western companies to overcome. While there continues to be a lot of hype about China being the next big market for Silicon Valley companies to conquer, the reality may be completely different.
And who's to say Google's technology is better? Netanel Jacobsson is one person who should know - he runs the up and coming browser Maxthon from China. In a recent post Netanel commented on whether America still has a lock on innovation. In short he doesn't think so and indeed had this to say:
"China should not be seen as a copy cat - but a great force on future innovation. Between 2004-05 there was an increase in close to 40 % in filed patents from China."
Source: Sina
Also, regarding Baidu in particular, China Web2.0 Review noted recently that Baidu gained market share last year and strengthened its leadership in China’s search market. Meanwhile Google China lost a significant amount of market share:
"According to CNNIC report, 62.1% users choose Baidu as their preferred search engine, representing an increase of 10 percentage in one year, while Google China’s market share decreased 8 percentage to 25.3%. In Mr. Lv’s research, Baidu gained 13% market share in last year, almost two third users use Baidu as their first choice, during the same period, Google China lost about 12% shares."
Why the market share slump for Google in China? According to Tangos Chan, who is the publisher of China Web 2.0 review, "Google China did not think locally."
This theme that localization matters has come through very strongly in our series of posts on international web markets. Perhaps it even matters more than the technology.
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Search Engine market is very different in china.
One of the most important problems with Google China is they do not have authority to improve the product locally.
All things which Google China had alread done, are just translation from English to Chinese. Also, they got a bad chinese name, called "Gu ge".
Posted by: workstar | September 17, 2006 11:39 PM
Richard, I think that there are several reasons for why Baidu is doing so well: It's a local Chinese brand (local company = local pride), Baidu are expert on Chinese search and they had the advantage of having established them selves early. Having said that, I dont think that Baidu' search technology is superior to Google's from a technical point of view, rather they have an advantage is having been doing Chinese search longer that Google and Yahoo. Google is really beefing up in China and recruiting top talents so I am not sure that the story is over just yet. Also, the loyalty of Chinese Internet or high-tech related companies is very difficult to find and Google might very well be able to attract Baidu employees (and know-how)over. But for now, Baidu definately has the lead.
Posted by: Netanel Jacobsson | September 18, 2006 4:34 AM
workstar, good points about Google China.
Natenel, thanks for the extra info about Baidu. It's interesting you think they are vulnerable with technology and keeping staff. I wonder is Google China currently staffed predominantly by Chinese people?
Posted by: Richard MacManus | September 18, 2006 5:58 AM
My pleasure Richard. Yes Google China is dominated by Chinese people.
Posted by: Netanel Jacobsson | September 18, 2006 6:30 AM
Google China`s CEO is Dr. Kaifu Lee .
Actually , the key factor in China market is to fit the policy.Or if you can ,change the policy:)
Another reason is the search technology ,especially in chinese.The result of a chinese word from Baidu is always much better than Google.
Posted by: wxlwxl | September 18, 2006 5:10 PM
There are two kind of people in China while they choose the search engine. Those who use search engine for the common uses may choose Baidu. Those people may not familar with the Internet and of course Baidu is much more powerful to get what happens in China. Other people who are good at internet may use google as their first choise. These people has a longer internet history and they know google is better to get what they want. Most of these people know web 2.0 and what is new happening in the Internet. Because of some reasons, Google's website cant be opened sometimes,these " professioners" use google.cn instead of Baidu. Baidu is local in China and they are good at Chinese language search,while google is not doing very well in this field. Baidu gains much more market share maybe is with the help of the government.
(and by the way, I have translate this post to Chinese in my blog,hope it does not matter.)
Posted by: Feir | September 18, 2006 6:13 PM
baidu has a very bad reputation in china,at least among the friends i know(most of them are university students).they do prefer google while its technology in searching chinese needs to be improved. google enjoys a very good reputation, esp its mantra "Don't be evil" which was a little harmed by the emergence of "google.cn"
and very few people use google.cn in china. unpopular at all. if google.com cann't be accessed, they will turn to baidu rather than google.cn
Posted by: newskoo | September 19, 2006 3:44 AM
I am from China, and a fan of Google. I'm confident that Google will surpass Baidu in future. Baidu has bad reputation for their censorship. In fact Baidu's technology in searching Chinese is worse than Google. By using Google you can get what you want, but Baidu can not.
Posted by: Mountain | September 19, 2006 10:23 PM