“Search is the crown jewel of the Chinese Internet market.” Thus came China’s search engine war, fueled by the outpouring money from foreign investors and the overwhelming number of competitors in the market.
Shortly after Baidu’s phenomenal IPO last August, Tim Draper, managing director of Draper Fisher Jurvetson, which invested $10 million for 28 percent stake in Baidu, said: “the war is already over, Baidu owns the market.”
Well, maybe not yet. Recent survey results by Keynote Systems, an Internet performance authority, show that Chinese users prefer Google to Baidu. According to Keynote, Google won the highest user ratings in 11 of 13 categories including general search, news search and image search, while Baidu came first only in music search.
This shouldn’t be a surprise. Even at Baidu’s IPO frenzy, CNNIC data revealed Google beats Baidu in traffic share for individuals 25 years old and up with higher education. People who use Google tend to be professionals with higher income, and they use Google to search for information and knowledge. On the other hand, the majority of people who use Baidu as their primary search engine use it to search for downloadable music.
In my previous post, I talked about local players having an upper hand against their global counterparts because of their intimate customer knowledge. So far, foreign Internet companies don’t have a good record of success in China. Yahoo!, for example, entered the market early and bled money for years, but couldn’t overtake the dominant Chinese portals.
There are certainly plenty of reasons that Google may be humbled in the China Internet market.
“History has shown us again and again,” Sohu’s CEO Charles Zhang said bluntly, “just like Yahoo! failed, Google will fail. I don’t worry about Google – it’s not even on my radar screen. To us, it’s only Baidu.”
History may or may not repeat itself. I bet Google is on Charles Zhang’s radar screen now. The competitive landscape is changing quickly. Who will be the final winner of the crown jewel of the Chinese Internet market still remains to be seen.