Google's Chinese Ambitions Paused for Now | Actionable Insights

Google’s Chinese Ambitions Paused for Now

by Lisa Bari and Ting Ting Jager | June 25, 2009

Google’s ongoing struggle to win over China’s 298 million Internet users suffered a devastating blow last week when China’s government accused Google of promoting pornographic content and said it would be required to turn off its “automated search” feature (essentially autocomplete for search terms, especially important in China with the particularities of the Chinese-language script and keyboard).

google-baidu

At the same time, Baidu has begun to recover from its recent slip in market share and negative press coverage. Baidu has been accused of blurring the line between paid and organic search listings and allowing advertisers promoting illegal content to run unchecked on their site. Accordingly, the stock price has recovered from its 50%+ plummet in the end of last year.

According to Baidu’s CEO, Robin Li, since Baidu cleaned up its site and addressed the problems, traffic and advertiser spending has increased. In fact, Baidu is now gradually closing its 8-year search engine advertising bid ranking system, and moving towards “Professional Edition” (previously known as (Phoenix Nest Edition). The new system will display ads in a more Google-like fashion, showing ads on the right panel instead of mixing them with the organic results and noting them as “paid”.

With 298 million Internet users, China is a hot market that cannot be ignored. However, global Internet advertisers remain watchful about the Chinese government’s controlling mentality and forceful actions. In recent news, to assert more Internet control, Chinese government continues to require Internet censorship software to be preinstalled on all computers sold in China starting July 1. Some believe that the Chinese government’s strong actions against Google is intended to draw attention away from the Green Dam topic.

ACTIONABLE INSIGHT: Advertisers should be aware of the limitations and restrictions in China, but not be deterred from this huge market potential. Start a small-scale test with localized campaigns and take advantage of the extremely cheap CPCs to reach an untapped market.