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Google China Losing Users to Rival

September 22, 2006
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(SinoCast China IT Week Via Thomson Dialog NewsEdge) BEIJING, September 22, SinoCast -- Search engine titan Google China is losing its core users to its rival Baidu.com in China, according to industry reports.

The China Internet Network Information Center (CNNIC) said that this year Google China represents 25.3 percent in the nation's search engine market, decreasing from 33 percent in 2005 while Baidu's market shares jumps from 52 percent to current 62.1 percent.



Google China is more popular in Shanghai while Beijing netizens prefer Baidu, the center concluded. In addition, the market reception of Google is 20 percentage points lower than Baidu.

Google China's other big competitors have not gained share rise this year either in the Chinese mareket. Yahoo! China, Sohu.com and Sogou.com have a combined share of only 8 percent, and let alone a smaller rival iAsk.

Search engines including Google China are struggling to capture a larger share when Baidu is becoming the number one in the Chinese market. Google China's US parent has spared no efforts in its operations in China since last year.

Another US giant Yahoo! poured USD 1 billion into its Chinese business with hopes of taking the lead in the world's most populous market.

Domestic players have no found a way out facing Baidu's crazy expansion yet. Charles Zhang, founder of Sohu.com, a front-running Internet portal, claimed a year ago that it would exceed Baidu rapidly.

The center, however, stressed that Baudu's users are mainly students, which have brought less commercial value than other kinds of users.

The report of Lv Bowang, a well-known Internet analyst in China, delivered the similar bad news to Google China.

The report said that Baidu and Google take 64.5 percent and 20.6 percent respectively. This year Google has lost 20 percent of its core users, 80 percent of which has turned to Baidu.

Now Baidu has successfully reduced its reliance on its MP3 search business and grown into a mature search engine with a wide business variety.

But he pointed out that Google China has gained high-end users, most of which have monthly income of over CNY 3,000. It has more advantage in enterprise culture and innovative products than Baidu.

More competition is coming soon. Google China has not moved its server to China yet due to various reasons. Jack Ma, head of Alibaba.com, has just finished the adjustment in Yahoo! China.

And Charles Zhang said that Sogou has not been in full sail by now.

Increasing rivals are imposing huge stress to Baidu. Is Baidu ready for fiercer competition? Things are not so optimistic to Baidu, industry insiders predicted.

For the moment, Baidu has a majority share of more than 85 percent in the Chinese MP3 search engine sector, and it gains visiting traffic of over 30 percent from its MP3 business.

However, Baidu often finds itself involved in a lawsuit because of its biggest operation. It is accused of supporting pirate music operations.

But it has no plan to discard its MP3 business now for the huge visiting the business has brought to the search engine.

In addition, Baidu is challenged for the speed of its Internet access and the stability in its server. On September 13 its services stopped for nearly 30 minutes suddenly. The search engine claimed that it has been stricken by hackers and incurred a server collapse.

(USD 1 = CNY 7.96)

Copyright 2006 Sinocast


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