Google is experiencing, probably for the first time in a very long time, what it feels like to not be the first in a race.
In China the local search engine, Baidu, is not only the most popular search engine, but it has even increased its market share, from 62.3% to 64.5% during the second quarter of 2009 according to Bernstein & Co., while Google may actually have lost some of its market share.
According to reports, Baidu’s revenue for the second quarter of the year has gone up by 37% to $160.7 million, and their net income has gone up by 45% to $56.1 million compared to the second quarter of 2008 when their revenue was $117 million and net income was $39 million, which is far more than observers and analysts had predicted.
To be fair, Google has also made financial gains in the region during the same period, but have not provided any details on the subject, probably in an effort to avoid having to admit that they are not the first in such a big and growing market.
It is obvious that the Chinese population has preferred their local search engine, to the international search giant, but it is also true that while Google and other sites have had trouble with the Chinese authorities for non-compliance of certain rules, Baidu gets the governments support as it complies with their requirements.
Baidu has not only reached the number one position in the Chinese market, but has managed to retain it in spite of the fact that their sales personnel went on strike for a period of two weeks which itself is quite an unbelievable concept in most other parts of the world. In fact in spite of the strike, Baidu expects to gain a further 15 to 18% in revenue in the next quarter.