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Industry Trends

Google Defends Shrinking Chinese Market

By September 23, 2010July 30th, 20232 Comments

In spite of recent reports suggesting that Google has lost a substantial portion of their market share in China, the search giant has not given up the fight. 

Google has recently decided to hire a number of new employees in China. They are on the lookout for candidates to work on a variety of roles ranging from technical to marketing departments, with designations ranging from software designer to national marketing manager.

Six months ago, Google had to shut down their search service in mainland China following differences with the Chinese government. Since then, users have been referred to the Hong Kong site. The site, however, is not always available, thus causing Google to lose more market share.

The reported loss suffered varies according to various sources. According to Google’s market share fell from 23.6% to 12.3% and the search engine’s ranking also fell from the second position to the third. According to Analysys International, Google has retained the second position in the market, but their market share has fallen from 30.9% to 24.2%

In spite of this loss in market share, Google has continued to maintain offices for research and development and for advertising. A spokesperson for the company says, “Our engineering teams in Beijing and Shanghai continue to focus on bringing a steady stream of innovation to our services in China,”

This information, coupled with the fact that Google actually renewed their license to operate in July, has given hope that they may be in talks with the Chinese government and may eventually restart their operations in the mainland.

In the meantime, Baidu, the official search engine for China, is way ahead of Google in terms of market share. Advertisers are still keen to do business with Google as it has been found that users who opt for Google are more educated and also richer than most others, and are thus more likely to spend money on the products and services being advertised.

Considering that China already has over 420 million internet users and continues to grow, even 20-30% of the Chinese Internet audience could bring substantial revenues to Google. It is in their best interests to restart their search service in mainland China.