Tuesday, April 11, 2006

Google CEO China to Rescue

Google CEO Comes to Rescue, May Taste the Bitterness of Globaliztion

By Lu Peng

While still under investigation by US Congress and troubled by many law suits, the US government yet to hand out the verdict for Google's Chinese strategy, Eric Schmidt is hastily visiting China with the title of Google's global Chairman and CEO.

It's his first official visit to China with the formality. He has even scheduled to give a speech at Peking University. Is he "Grand Opening the operations in Chinese market" as indicated by Google.China officials, or for some other reasons?

Is Schmidt the rescuer?

It's not a wild imagination if you look at Google's performance in China in recent years. According to CNNIC, Google is gradually losing the pioneer advantages in search engine market. The market share is moving to it's largest competitor, Baidu rapidly. There was no significant growth in Google's user base in 2005. It not only falling behind the rapid ascending Baidu, but also face the competition of Zhongsu and Yahoo.China. Google's invasion into China is clearly slowing.

Last year, there were some bright spots. The best part was that Kai-Fu Lee and Johnny Chou joined the camp. However, besides the press "showing", they have not brought in what Google most desired improvement of relationship with the Chinese government, nor the enhancement of channels. Lee and Chou's "non-performance", in addtional to rumored uneasiness between them, we can see the image of a "rescuer" overshadowing the image of an"ambassador".

Can Google break the spell?

Google is nothing short of a success story in the US. It's market value has surpassed the combination of Chrysler, GM, Ford plus Disney. But in China, Google is a mess. It is kind of like a violent combination of Microsoft and UTStarcom. For people familiar with the Chinese internet market, this is no strange phenomenon. From the early days that Sina defeated Yahoo, to recent supression of eBay by Alibaba's Taobao, the technological advantages of foreign companies have failed to be transformed into market advantages. In this "winner takes all" era, it is in some degree indicating their doomed future in the Chinese market.

As Yun Ma assured, the reason eBay could not beat Taobao is because they don't understand Chinese Market as well as Taobao. They don't understand the shopping trends and habits of the Chinese people very well. Google is facing similar problem. The Schmidts are buried in the enthusasm of techinical innovations, but ignored that the internet is connecting the daily lives of common people. Coming out the laboratory, search engine becomes uninspiring market. The difference between Google and Baidu is not only the difference between two languages but more importantly the difference between two cultures. For Westerners, the East is always mysterious and hard to search.

Is Google ready for China?

Even indeed that Schmidt is coming to"commence operations in Chinese market", is Google ready for China? With ambitions of global dominance, Google hasn't done that well in Germany, and France. Look all over the world, China is the last unexplored market left with non-Anglosaxon culture. That's why Schmidt is here. However, the first problem facing Google will be whether it will be accepted by Chinese government and the users. Facing the embarassment of law suits by Gmail users, how can Google melt into the Chinese culture? Are they hoping to change the views of the Chinese?

Yet don't forget that, Google is facing a stronger rival they never faced in any other countries, that is Baidu. Following the rapid rise in number of net users in China, Baidu is building world's largest Chinese platform through product innovations. With post.baidu(Baidu's popular bulletin board) and zhidao.baidu(Baidu Knows) and the soon to be released Baidu.encyclopedia, Baidu is becoming the online community of Chinese as well as worldwide Chinese speaking users. Just like a picture painted by Robin Li, "When net users need to search information, they will naturally coming to Baidu. It is not only because Baidu is the largest Chinese search engine, but also because they can find people here who shares many common interests. Baidu is like a community where Chinese feel they belong, where they can communicate, and where they can search."

Baidu's special attraction, is also enticing many global companies who are interested in the Chinese market. Global giants such as Pepsi, Nokia, and Intel, who have already good understandings of Chinese market, have chosen Baidu as partner. They know that through Baidu, they will be getting closer to the Chinese people.

The departure of eBay's ceo Whitman announced the failure of eBay's US minded marketing strategy in China. Wishfully, when Schmidt departs China, it won't be an omen of another misfortune!

Translated from Chinese


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