Time: 45 minutes
Wall Street Journal
While it continues to battle the Chinese government over censorship and privacy concerns, Google Inc. is pushing forward with a bid to find new business.
In a speech earlier this month, Elliott Ng, Google’s new director and head of product management for China, said the company was not only generating revenue there, but had its most profitable month ever in China in December.
Google is also hunting globally for acquisitions that can support the company’s initiatives, particularly in mobile and e-commerce applications, Ng said at an open-sourced lecture event organized by a group called Techyizu.
“Google is a small player,” in China, Ng said, but it will continue to grow its business.
Ng said the company would not be changing its approach towards China when it comes to Internet search. Early last year, after experiencing cyber attacks in China, the company redirected its Chinese site, Google.cn, to an uncensored Chinese-language version hosted in Hong Kong. China is one of only five geographies in the world where Google does not receive more than 50% of search traffic, according to Ng. The others are Taiwan, Russia, The Republic of Korea, and the Czech Republic.
The bulk of the work that Google’s staffers are doing in China is centered on servicing global operations, Ng said.
A spokeswoman for Google said the company was focused on selling ads to Chinese companies looking to export their products overseas, and on new types of display advertising for the country’s booming Internet market.
“If you look at the new areas that they’ve been getting into with mobile Internet and cloud computing, they should be looking in areas like that and shopping around in areas like that,” said Michael Clendenin, founder and managing director of RedTech Advisors (China) LLC. “There’s still tons of untapped opportunity there.”
In an interview with WSJ earlier this week, Daniel Alegre, Google’s president for the Asia-Pacific region, said the company’s run-ins with the Chinese government haven’t hindered the company’s ability to launch Android-based devices in China. “The importance of Android is that it’s an open-source platform,” Alegre told WSJ. “Anyone can use it. Because of that flexibility, China Mobile launched a number of Android phones so we’re not really limited in terms of the Android penetration.”
Clendenin said Google could still make its presence felt in China, either through proxies or through joint ventures. “It makes sense for them to look at China not just for the pure play China opportunity, but for them to scoop up technologies that could be applicable in other markets,” he said.
One reason for Google’s continued success in China, despite its having ceded the market to domestic competitors last year, is the explosive growth of the overall online ad market in China.
According to Clendenin, the online ad market grew approximately 46% in 2010 and is expected to grow 40% in 2011. So even with Google’s declining market share the company was able to ride the overall growth of the advertising industry to the best performing month of the company’s history.
– Jonathan Shieber
After reading this article I am still surprised how there are countries like China which are so drastically different from the US. When you have communism in a country global companies have to come up with a completely new approach.Advertising is no exception. It is difficult to picture a megacorporation like Google struggling, but China is a huge country and to not be the top search engine there is a big deal.
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