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Cold wars and search wars

James Christopher Chris Westland | Jan. 29, 2009
Making sense of Chinas Internet

In April 2006, Google China arranged a small group of Googles Mountain View executives to visit some of Chinas Internet bars, and by 2007, Google began a new project to develop products targeting Internet bars. Internet bars are often the first place for young Chinese to access the Internet. Project manager Wang Hua espoused some straightforward guidelines: Put yourself out on the street; find your target users, do some tests, get your clues, and build your test into a strong case with cross-department collaboration. Never try to start big. Never try to change consumers minds. Prove your idea with small successes.

Wang monitored traffic at Internet bars across China, with interesting results. Statistics showed that areas near schools did not have as much of high traffic as expected and that certain collaborative products would be spread out of the bars in the area. It made Google the default homepage on the computers browsers in the partnering Internet bars and limited the right to install software or set parameters on these machines. So far, Wangs experiments have pushed traffic up substantially, putting Google China back in competition.

Google also started to co-brand products. Google Kingsoft Ciba is one example, which embedded Googles toolbar in Kingsofts products. Google helped US-based Amazon.com acquire Kingsofts Joyo.com, which caused Google Chinas English-Chinese translation to experience an increase in traffic. Another co-branding with Top100.cn, one of the largest online music libraries in China, allowed for free online distribution of songs similar to Baidus offerings. The labels can share the money from the advertising Google places on Top100.cn.

These and other activities are ones which Googles global management at Mountain View would never have considered on their own, but which have been pivotal for the survival and expansion of Googles business in China.

Creative commons

Creative minds are rarely tidy, and so it goes for creative companies. While Google slogs forward, four of Chinas most innovative dot-coms continue to distinguish themselves with the introduction of novel services. True, Chinas leading portals share lots of me-too content, but leaders such as Sina.com, Sohu.com, NetEase and Tencent forge ahead with add-on services.

For example Sinas celebrity blog has become its primary traffic driver, which alone pushed Sina.com to conquer nearly one-third of Chinas online advertising market in 2008. Meanwhile, in Shanghai, rival Sohus online game, TLBB, attracted 23 million gamers across Asia. Elsewhere, NetEases e-mail controls more than half the market, which generates much of NetEases advertising revenue. And Tencents QQ messaging service has 80 per cent of user market share, helping them to create the largest online park in China, with new offerings in the US on PCs and iPhones. Chinas search wars have left plenty of space for local rivals, who arguably understand the social part of social networking better than their global rivals.

James Christopher Chris Westland, PhD, CPA, is professor and head, department of information and decision sciences at the University of IllinoisChicago.

 

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