Analyst Says Google China Still In Trouble

Baidu's share of ad market to grow

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So much for the time, money, and compromises on censorship Google’s committed in the region thus far.  Plus its new music venture.  An analyst said this morning that Google’s Chinese arm won’t do so well, anyway. 

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Google’s main problem is Baidu, which is as popular as ever.  Baidu’s very much on top of the Chinese search market, for example, with a share of around 65 percent depending on which source you favor.

As for Google’s music offering, which is supposed to help make the American company more attractive to China’s many young people, Bernstein Research analyst Jeffrey Lindsay said, "Chinese users will continue to utilize the Baidu service that they are most familiar with."

And all of this may have a predictable effect on the overall standings of the two corporations.  According to Eric Savitz, Lindsay "lifted his estimate on Baidu’s share of the overall Chinese ad market to 36.4% from 35.7% for 2009 and to 37% from 34.8% for 2010.  He now sees revenue growth of 33% in 2009, versus the consensus at 29%.  He adds that the company’s new Phoenix Next ad auction system appears on track for a mid-year debut and that it should add incremental monetization power."

Perhaps as a result of these comments, Baidu’s stock went up 5.81 percent today.  Google’s rose by a less-impressive 2.44 percent.

Analyst Says Google China Still In Trouble
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  • http://www.payperclick.com.cn Baidu Pay Per Click

    Google China will definitely need more than that new music offering to reverse the trend in terms of market share in the search market in China. Baidu has simply proven better and risks are this will turn into a monopoly in years to come.
    Chris, Shanghai

  • http://www.onlinetv.us/guide/ Online Video Guide

    We see most video sites banned baidu and all China IP numbers. They come looking for porn and that is all they want. Music is not via google, Apple or any of the others since they use the sharing networks. The most searched term was “sucking toes” so there is the sweet spot in the China market and a clue to the mindset of a subordinated mass.

    The Chinese have a long way to go before they become “normal” online consumers.

  • http://www.realestatewhangarei.co.nz Jared

    As a bit of a novice when it comes to the popularity of Search Engines and Browsers around the world, this is the first I have heard of Baidu. It really excites me that there is someone out there that can compete with Google, even if on a minute scale.

    As a businessman, I have a huge amount of respect for Google and what they have achieved in such a short amount of time. There are very few businesses that can achieve what they have.

    However . . .

    As a consumer, it scares me the market share google currently holds. If they carry on at this rate they will soon control the entire internet (some may argue they already control the majority).

    It will be interesting to see how things pan out.

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