Part One: Why Would Google Leave China?

Google China’s leaving news is now over spreading on the Internet. Why would Google leave world’s largest online market in population? Let me explain the matter to you as a local Internet veteran. I can’t guarantee what i said is 100% correct, but i am sure there are quite a number of People in China have similar thoughts with me on this regard. In one word, i can represent a group of people in China.
Firstly, blasting fuse for Google China affair originated from a hacker attack in this January. Google said the hacker aimed at the email accounts of known Chinese human right activist as well as some core program for the search giant’s business operation. The cyber hacking case provoked Google.

Secondly, China imposes Internet censorship regulation & law in the country while Google believes in the principle of “free flow of information’ and dispute aroused between two different believers. Google insists that it will not continue its operation in China unless the government removed its Internet censorship law from it; While China government, of coz, would not compromise on this matter as it believes pornography, violence as well as sensitive political information will be filtered under strictly censorship. The government trust healthy Internet environment is good for stability and sustained development of the society.

Thirdly, localization pain. Google succeed in most regional markets of the world, while in China, it didn’t. Largest search engine firm in China is Baidu.com. Google ranks after Baidu as the 2nd largest search engine. Market shares for Baidu and Google are 58.4% and 35.6% respectively. Will Google leave China if it’s dominating the country’s searching market? of course not! Why would Google lose Baidu in China market? I would say it’s because of its terrible localization strategy. Market environment in China is quite different comparing to that of the United States. Google missed Gold opportunity by not adopting tailored market strategy in China.

Fourthly, political factor.

Part Two: Should Google leave China?

My personnel answer is no! 1. Google has 122 million loyal searching users in China (Note: China has 340 million Internet users up to now). These users love Google for its continuous innovation, multi-function and fair searching results. These loyal searching users are unmeasurable assets to Google. By leaving China, Google will most likely lose a huge number of loyal fans. 2.As world’s largest web market by users, China can be a key avenue for Google’s future growth. Google’s China annual revenue is estimated to be $300 million to $600 million. Even though it accounts for a tiny slice of the company’s $24 billion annual revenue, it is growing very fast. World’s largest online market by users means great opportunity to the searching giant. The market itself is continuously changing and innovating.

Even though Google has failed the 1st round competition with Baidu, no one can conclude Google will fail again in the 2nd round of competion on wireless searching in China. Google also attaches great importance on China market for its Android smart phone operating system. After moving out of China, i doubt the company can successfully carry out a marketing campaign as effective as it used to be.

Part Three: When will Google leave China?

There is rumor saying Google will make its “leaving” announcement on Monday, March 22, 2010 and abandon www.google.cn on April 10 and then officially departs from China. Doubts also arouse regarding if the search giant will leave China completely as well as how will the company compensate its employees. Analyst says Google may choose one of the following 3 options: A. Move out of China completely. B. Close the Chinese search engine www.google.cn and keep the existence of its research and development center in Beijing China. C. Keep running its Chinese search engine by following related Internet censorship regulations & laws. Most people trust Google will choose option C.

Part Four: Who will benefit from Google’s leave?

Most people believe Chinese local powerhouse Baidu Inc will be the biggest winner from Google China’s move out. In fact,Baidu’s shares have surged 44.5 percent since Google’s announcement that it could pull out of China. It is said Market share of Baidu is expected to increase from approximate 60% to 90% after Google abandons China market. Some smaller Chinese search engines including Youdao.com, Sogou.com will also be benefited.

Part Five: Tragic End for Google Advertising Agencies in China

The dispute between the search engine giant and the Chinese government is destined to have a tragic result. It marks a setback for Google’s global business strategy, meanwhile, investment environment in China will also be devalued long term by this affair.

Victims also include Google’s Chinese advertising agencies. Google totally has 27 advertising agencies in China. In the past, these advertising agencies has provided unconditional supports for Google’s business development in China by hiring more people, upgrading office facilities and etc. With Google’s moving out of China, these advertising agencies will have to go bankrupt. Google’s moving out affair is regarded as an irresponsible business action by most of these advertising agencies in China.