Fight of the Two Giants
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Baidu is becoming an ever-taller poppy in China. That has its advantages for the internet search-engine company. In the three months to June its net profit more than doubled form a year earlier, the second quarter in a row it has achieved such growth. It is accumulating customers at a steady clip and managing to make revenue from each of them.
Google's run-in with Chinese authorities has helped. The Us giant had been gaining market share in China 38% before its cloud. Google announced it would stop self-censoring search results on its China site. However, it also wanted to keep doing business in China and so had to find a way to avoid breaking Chinese law. Back in march, the company began to redirect users from the Google.cn page to its Hong Kong site, Google.com.hk, which was uncensored. Beijing objected to that automatic referral, so on June 28, Google made a minor concession by stopping the automatic redirect and instead provided a link to Google.com.hk that users could clicks on. Google's renewal application deadline was June 30.
To be clear, Chinese users still aren't getting uncensored search results if they use Google.com.hk to search for forbidden topics, the data are stopped by the Chinese government's "great firewall" software. The user gets an error message and sometimes has the Internet connection cut off for a short period. The main differences now are that Google is no longer complicit in the censorship, and the user is more aware that search request is being censored. When Google was doing the censoring, the only indication that search results were incomplete was a small message at the bottom of the screen. Beijing is no doubt hoping that many Chinese netizens will find the blocked pages to annoying and abandon Google, using the main domestic competitor, Baidu, instead. But the Google search engine and the company's other services remain important tools for many Chinese. Although Google caused some loss of face to the government by taking a stand, blocking Google entirely would only high-light the country's political back wardness. Google, meanwhile, wants to keep a toehold in his huge and rapidly growing market, and for now it seems to have done so.
Fortunately, Chinese authorities renewed a license needed by Google Inc. to continue using its Chinese web address, despite months of tensions over censorship requirements. They approved the renewal application by the operator of Google's China website. All content also it provides is subject to supervision of government regulators. The decision preserves the search giant's toehold in the country with the most Internet users. But it will not end the uncertainty around Google's future in China because Beijing can revoke the license at any time or block access to Google's services.
But Baidu has re-established its dominance: it now claims 70% of all Internet search revenue in China, according to Analysis International.
Still, such market dominance could have a downside, too: few, if any, Chinese companies are so preeminent in their sector even among state-owned enterprises. On the face of it, the company could be threatened under China's anti-monopoly law, in place since mid-2008. And late last year, a little-known online information platform operating in the pharmaceuticals sector claimed Baidu had down-graded its position in search results, abusing its market dominance. The plaintiff failed adequately to prove Baidu's market dominance. But it is likely more cases could brought by better-prepared interests. In late 2008 again, a hostile TV program by China's state broadcaster sent Baidu's shares plummeting.
Baidu should tread gently with its big feet and Google with its big hand.
But which will be the winner of that big market?
Some analysts said Google has already lost some of its search share in China to rivals Biadu during its stand-off with Beijing, though other services including its Gmail email service continue to be popular.
Wait and See!!
Fight of the Two Giants
By: randrianasoavina eric
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