2010/07/22

Google loses out in Chinese search engine market

BEIJING, July 21, 2010 (AFP) - Google's share of the Chinese search engine market fell in the second quarter while the US Internet giant was embroiled in a public battle with Beijing over censorship, a research firm said Wednesday.

The web titan's share of the world's biggest online market fell to 24.2 percent in the three months to June, from 30.9 percent in the first quarter, Analysys International said in a report.

At the same time, Chinese web search engine Baidu increased its dominance with its market share rising to 70 percent in the second quarter from 64 percent in the first three months of the year.

China's search market was worth 2.67 billion yuan (394 million dollars) in the second quarter, up 48 percent year on year.

"Uncertainty over Google helped Baidu to expand its market share," Analysys said.
In March, Google said it would no longer bow to government censors and effectively shut down its Chinese search engine, automatically re-routing mainland users to its uncensored site in Hong Kong.

The web giant has since tweaked the way it re-routes users in order to gain the renewal of its business licence in China.

Analysys said Google's decision to shift its server to Hong Kong and uncertainty over the renewal of its licence cost the company valuable market share.

"But now the uncertainties have been resolved, Google will make a comeback," the research firm said.

The number of Internet users in China has leapt to 420 million, according to official figures released last week.

The figure, almost a third of the population, marks an increase of 36 million -- more than the population of Canada -- since the number of users was last given at the end of 2009.

Baidu is due to release its second-quarter results, which analysts expect to show a 67-70 percent year-on-year increase in revenue.