Apr 4, 2007

Spotlight China: Move Over Google - Here Comes Baidu

Already - China has over 100 million Internet Users and this is just the begginning. There's no question that Chinese Internet users will soon be the largest block of online users world wide. Over 87% of the Chinese Internet audience uses search. And given Internet search’s dominance of monetization and audience rankings globally, the competition for the top spot in the Chinese search market is pretty intense.

Baidu, Google, Yahoo, Sohu and Sina are battling each other to be the leading provider of search in China. Currently the two largest search players, Baidu and Google, account for almost 90% of the searches (source: CNNIC Search Survey, 2006).

More than 3 out of every 4 Internet searchers in China use multiple search engines Therein lies one of the more interesting dynamics of this market: Baidu and Google clearly lead the field in all aspects of search, through the variety of searches they offer and the quality of their results. Sohu features more prominently in MP3 and video search, compared to its lagging ranking in web search. Yahoo, on the other hand, has been struggling with its local partnering strategy - as it failed to take advantage of large acquisitions locally, including 3721 and the much publicized Ali Baba. Indeed Yahoo's brand seems weaker in China compared to Google’s and other local players.

Baidu is currently enjoying virtually double the market share in all types of search over Google. A 2006 Study by CNNIC cites other reasons for Baidu attracting a large user base, including Baidu’s well-liked Bulletin Boards and its responsiveness. Baidu also benefits from its wildly popular MP3 search, which takes users directly to downloadable music. This could be a major headache for Baidu in the future if China decides to tighten its enforcement of IP laws, with respect to illegal music.

Sohu, Sina and Yahoo all draw significant numbers of users to their search sites through their popular free email offerings, but that’s still not enough to help them break into the upper echelon of search - currently occupied by Baidu and Google. In terms of brand awareness, Baidu once again stands out with 87% - while Google and Yahoo trail with 64% and 39% respectively (source: CNNIC Search Survey, 2006).

Furthermore, more than 50% of Baidu’s users are under 23 years old. Since 80% of people under 24 years old use the Internet in China, compared to a much lower ratio for older age groups, Baidu’s momentum is bound to continue. Maybe it’s for this reason, and lack of further explosive growth opportunity at home, that Baidu decided to launch its first international search in Japan last week.

While Google’s perception has improved considerably among Internet users in China, its refusal to offer its Gmail and Blogger services locally (due to privacy concerns) will probably slow its efforts to boost its user base. However Google continues to invest in the Chinese Internet market, with a minority stake in P2P player Xunlei - which is aimed at the local online video market. This move might have other benefits for Google, as Xunlei doesn’t support Baidu downloads for instance.

Among all the players, the one to watch is Tencent. Given its dominance in IM and success in entering new markets such as casual games, mobile chat and virtual goods - it has the value proposition to make a decent entry into the Chinese search market. The Chinese search market is bound to hold a few surprises in the next year or two, as most Chinese Internet users claim that factors such as duplication of results, freshness and quality of the way results are ranked, could use further improvement.

Speaking of improvement, Google apparently needs to pay more attention to the quality of its image search, as it returns virtually no images for the Chinese name of former president Deng Xiaoping. Baidu, on the other hand, could be leveraging its new Japanese office to offer a better service to its users searching for adult terms like “sex”. Baidu apparently returns only 3 results for “sex” in its Chinese site, whereas its new Japanese site returns 107,000 images for the same search term.
The Search Landscape in China is certainly worth watching..........

Apr 1, 2007

Can Anything Slow The Google Juggernaut?

The term juggernaut is used to describe any literal or metaphorical force regarded as unstoppable that will crush all in its path. Even more descriptive: any large, overpowering, destructive force or object, as war, a giant battleship, or a powerful football team.

Seems to me that a lot of people are going to great pains to define Google and explain their Mission/Vision. Growing up - I would always get into the odd argument with my elder sister. The defining moment of the conflict would always come when she say "I know you better than you know yourself". To which I would often reply - how can you possibly know me when i'm still trying to figure things out for myself?

Don't bother trying to define Google's Mission and Vision - don't even try to decipher their reasons for doing anything. How can you - when Google itself is still trying to figure things out? Heck - even the "do no evil" mantra has evolved quite a bit since we first heard it.......

That said, i'll define Google as the closest thing we have to a Juggernaut - in Online Space. A starting point for 400 million Internet users and the No. 1 gateway to the Net's vast commercial potential. With more data on what people are searching for, Google can serve up the most targeted and relevant advertisements alongside the results, drawing more clicks, more cash, more users—you get the idea. Consumers love Google's simplicity and results. At last count – the Search Engine which is clearly re-defining the advertising world, controls 56% of Global Internet Searches – and counting. No wonder eager advertisers shoveled some $10.6 billion into Google's coffers last year, up an astonishing 73% from 2005. If you can believe it, Google's $144 billion market value tops that of Time Warner , Viacom, CBS, ad agency giant Publicis Groupe and the New York Times Co. Combined.

Think about all that information on people’s buying habits – that alone could be worth Billions some day. Certainly – not everything Google does is successful. The whole Adwords for radio, print, and television concept - is yet to get off the ground.

As the Juggernaut continues to destroy business models – in advertising, publishing and just about everywhere else, there’s a growing fear that Google may be becoming too powerful. Recently, NBC Universal and News Corp announced big plans for a rival to Gootube, and I think we all know what that means – since UGC is clearly not the biggest driver of YouTube’s popularity.Viacom is took things a step further by suing Google for a headline-grabbing $1 billion, charging YouTube with willfully infringing on copyrights by allowing users to upload clips of The Colbert Report, South Park, and other TV shows. A couple of weeks earlier, Copiepress, a group representing Belgian and German newspapers, won a copyright case that could sharply limit Google's usefulness if it sets a precedent.Even some of Google's advertising customers complain that the company sometimes appears cavalier about their concerns.

That's partly because of the very technology on which it's built. Its search-ad business runs on a pointedly opaque set of complex mathematical formulas that give high placement to ads based not simply on which marketers pay the most but on how many people click on them and other factors. That prods advertisers to create better ads and more relevant Web pages to which the ads send them. But such a system leaves everyone to guess which ads work best and how much to pay for top placement, and the ranking can change without warning. I think that’s one of the key reasons why online advertisers worldwide are banging their heads against their monitors at this very moment.

Perhaps it's time to start changing Google - the verb to Google the noun

The Noun - Juggernaut: "a massive inexorable force that seems to crush everything in its way".