Tuesday, September 22, 2009

Google Slides into Silver

An article on ITnews.com this morning reported that search engine giant Google is losing its grip on the online search market in China to a company called Baidu, which is quickly gaining popularity amongst Chinese users according to the Chinese government.

Google, which has struggled to steal market share in China from dominant local rival Baidu, was the first-choice search engine for just 12.7 percent of search users at the end of last month, a fall of 3.9 percentage points from last year, according to a report by the China Internet Network Information Center, China's domain registration agency. The same figure for Baidu was 77.2 percent, up 0.3 percentage points, it said.

"Google has subpar usage and first-choice rates among new Internet users," the report said, predicting a further rise in Baidu's dominance next year. "As the number of Internet users quickly grows, Baidu's first-choice users will continue rising."

Just 6 percent of Chinese search users have tried Bing, the report said. But Microsoft's large user bases in Internet Explorer and Windows Live Messenger could eventually boost that number, it said. Internet Explorer is by far the most commonly used browser in China, and Windows Live Messenger is an extremely popular chat client in Chinese offices and Internet cafes.

China's fast-rising number of Internet users surpassed the size of the U.S. population to reach 338 million earlier this year. But much of China's population of over 1.3 billion remains offline, and new Web users increasingly come from less developed areas away from the country's prosperous coast. Google, which Chinese users often use to find English-language or work-related materials, is less popular among those users, said the report.

Google was more popular among high-end users than among the general population, while Baidu attracted users seeking entertainment features such as music downloads and video search services, the report said.

The downward trend of Google is an interesting one to observe. While the company still controls over seventy five percent of the American online search market, slipping in China should not be overlooked. China is one of the fastest growing economies in the world, and houses more humans that any other stand alone country. Because the Chinese demographic is exploding not only in their home country, but also overseas, this decline should alarm Google. On the other hand, Google loses over $1.5 million per day on YouTube, so I doubt anything would “alarm” them. However, the slip in China appears to be the first chink in Google’s armor that we have seen so far. It will be interesting to watch if the slide precipitates itself into other countries or remains isolated in China.

Either way, you know the gears of knowledge are grinding at Google as we speak. They aren’t very used to second place.

Joe Carretta

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