Baidu.com is the leading search engine in China with over 60% market share. Baidu also ranked third largest worldwide search property according to comScore, just behind Google sites and Yahoo! sites. China now has the largest Internet population in the world. By the end of 2008, China will reach 300 million Internet population and about 240 million search engine users. The Internet penetration rate is still low (about 20%), so I guess China could reach 400-500 million Internet users easily in the next few years to catch up to its 600 million mobile phone users.
Thus, Google won’t let Baidu take such a big piece of cake and remain happy with its current 20% market share in China. Google has partnered with China’s largest portal site Sina.com who used to use Baidu’s search technology and has also been the mobile search provider for China Mobile. Google is also going to invest a lot this year and beyond on advertising in China. They now have about 800 staff in China, but they will hire 200 or 300 staff each year in the next few years.
Last week Google teamed up with China’s most popular dictionary software – iCiba. iCiba has been the market leader for 10 years in the field and selling the dictionary software for about US$20 per copy. It has about 30 million loyal users. Google has bought it and started to offer the software for free. The 30 million user base will help Google to gain some market share and Google will also get some ad revenue from the built-in Google search function.
Yahoo! is a little quiet in the Chinese search market at the moment, although its partner Alibaba is doing great on B2B portal (Alibaba.com) and C2C auction site (Taobao.com). Microsoft is investing US$280 million to build a new research and development center in Beijing. The new R&D center is expected to accommodate 5,000 employees. There is a rumor that Microsoft is willing to invest in Baidu after its failure with Yahoo!.
It’s an interesting battle happening in China :-). At Netconcepts we’re keen to watch the developments as they unfold, but also keep our clients aware of the upcoming opportunities available in that online marketplace.