Google ends conflict with China, Baidu still a winner

News Posted - 2010-06-13

After winning permission from China’s government to continue to operate in the country, Google must now fight for relevance as Baidu Inc extends its dominance in the world’s largest internet market.

Uncertainty over whether Google would be forced out of China, prompted some advertisers to switch to Beijing-based Baidu. Google had its licence renewed last week after it stopped automatically sending Chinese users offshore.

“There is a big gap between Baidu and Google, and that gap has got bigger,” said Vincent Kobler, managing director of Emporio Leo Burnett, a Shanghai advertising agency that specialises in online marketing. “It’s going to be tough for Google, even with the renewed licence, to gain market share.”

Google’s market share in China fell to 30.9 per cent in the first quarter from 35.6 per cent three months earlier, according to data from research firm Analysys International. Baidu’s share increased to a record 64 per cent from 58.4 per cent, according to Analysys.

“It won’t be easy for Google because its service has been diminished in the past few months,” said Jake Li, an internet analyst at Guotai Junan Securities in Shenzhen. “Baidu is likely to stay ahead.”

Source: BS 13/7/10

Google helps build trade case over web censorship

Google is working with the United States and European officials to build a case that would argue that Internet censorship acted as a trade barrier, a top company executive said on Friday.

Google shut down its mainland Chinese-language portal earlier this year over censorship concerns and a cyber attack it traced to China.

China has the world’s largest number of internet users and while the market has boomed, Beijing has kept a tight grip over sensitive content on subjects like politics and ethnic unrest.

Robert Boorstin, Google’s director of corporate and policy communications, said the company was working with the Office of the US Trade Representative, State Department, Commerce Department and European officials to build a case to take to the World Trade Organization (WTO).

Such a case could help US tech companies, which were seeking greater access to Chinese consumers, while furthering US government’s human rights agenda.

US Secretary of State Hillary Clinton and her technology advisers have promoted internet freedom as a basic human right.

“Google believes very strongly, as do other companies, that censorship is a trade barrier,” Boorstin said during a panel discussion on internet censorship hosted by the Media Access Project, a Washington-based public interest group.

Boorstin said Google wanted to demonstrate that censorship resulted in fewer search pages, limited the capacity of the company to enjoy fair trade and also the ability to operate on a level playing field with competitors such as China’s Baidu. “Our goal is to maximise free expression and access to information,” he said. “This is a very important piece of business for us.”

The United States is studying whether it can legally challenge Chinese internet restrictions that hurt Google and other US companies operating in China, but a top US trade official said in March that direct talks with Beijing might yield faster results.

A WTO case over internet censorship would be the first of its kind and could take years to be resolved. Last month a top European Commission official said that China’s internet “firewall” was a trade barrier and needed to be tackled within the WTO framework.

Source: BS 13/6/10