Analyst Says Google China Still In Trouble

    April 2, 2009

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.