BEIJING - US Internet
search engine company Google, a dazzling success
story on Wall Street, is underperforming in
China's booming search engine market, a recent
survey has found.
Google's share of
China's Internet search engine market is rapidly
being eroded by its Chinese rival Baidu.com Inc,
the quasi-government China Internet Network
Information Centre (CNNIC) said recently.
Baidu.com has managed to increase its market share
by at least 10% during the past six months in
three major Chinese cities - Beijing, Shanghai and
Guangzhou - which account for the vast majority of
China's Internet population, the survey by CNNIC
showed.
"Google is losing to Baidu.com
though the number of Chinese users of Google
remains largely unchanged," said Lu Weigang, a
well-known Internet analyst
who headed the CNNIC survey. Baidu, which was
listed in NASDAQ earlier this month, is now ahead
of Google in all three cities in terms of market
share.
Only six months ago, Google was the
most frequently used search engine for Internet
users in Shanghai. CNNIC's survey found Baidu has
a 43.9% market share in Shanghai compared to 38.2%
for Google. In Guangzhou, Google has only a 28.7%
market share while Baidu holds 48%. In Beijing,
Baidu increased its share by 10.8 percentage
points to 51.5% while Google's share grew only by
1.9 percentage points to reach 32.9%.
The
survey also found Chinese Internet portals Sina
Corp and Sohu.com, which are also listed on the
NASDAQ, and US Internet giant Yahoo! are all
losing ground in China's fast-growing Internet
search engine market. Chinese firm 3721.com, which
was bought by Yahoo!, also shed 1.8% of market
share in the past six months.
The
rapidly-changing landscape underlines the
increasingly intense competition in the world's
second-largest Internet market, ranked by the
number of users. China's Internet population hit
103 million by June 2005, second only to the
United States, according to CNNIC statistics.
Search engines have become indispensable for
Chinese Internet users: for instance, 54.5% of web
surfers in Beijing frequently use search engines
each day, CNNIC's survey found. More than 80% of
Beijing Internet users use a search engine at
least once each week.
Last year, the size
of China's search engine market hit 700 million
yuan (US$86.4 million), compared to 100 million
yuan ($12.3 million) in 2002, according to
Beijing-based research house Analysys
International. Analysys forecast the market size
could reach 3 billion yuan by 2007. Local web
portals such as Sina Corp and Sohu.com have
launched their own independent search engines in
the past few years. Microsoft's MSN division is
also expected to launch the Chinese version of its
search engine soon in China.
Google had
long adopted a "wait-and-see" attitude toward the
Chinese market before it formally entered the
country in July. Before that, it had no formal
operations in China although it was a major
Internet search tool for many Chinese Internet
users. Inadequate localization has resulted in a
low brand awareness of Google among Chinese
Internet users, which put it at a disadvantageous
position compared to Baidu, said Lu.
Interestingly, CNNIC's survey found about half of
the surveyed Internet users misspelled "Google."
The competition in the Internet search
engine market is expected to become even more
intense in the near future as Chinese Internet
users are increasingly favoring a single brand.
The survey found that 34% of Chinese Internet
users use only one search engine when surfing the
Internet; and 41% use no more than two. That means
search engines that have yet to establish strong
brands could be wiped out of the market.
