Google Inc. (NASDAQ:GOOG) has a problem. It only has 22.5% market share in China (compared to Baidu's 61.5%), but that's not what the company's concerned about today. It's more concerned about Google's overall strategy in China. From Reuters: "China has a large mobile opportunity, with so many mobile users who will become mobile Internet users in the next few years as 3G and other technologies become pervasive," Lee Kai-fu, Google Inc's president for Greater China, said in an interview on Thursday.
The challenge of providing new products and services catered specifially to the Chinese masses who never touch a PC is Google's priority. Afterall, China is now the world's largest market for cellular phones, and the fact that cellular phones are increasing in their capability to act as PDAs and mini-computers (think BlackBerrys and iPhones) means that there is a market to be filled, and Google plans on conquring that gaping hole.
This also means that Google need to rethink their search engine model so that compatible services can be used on cellular phones and other mobile devices. Google's strategy in China so far has followed closely to their American business model, which assumes most users on Google.com are logged on with their computers at home. How does Google plan to revolutionize itself?
Google plans to acquire more local companies to help out. Mr. Lee said Google will buy stakes in a range of companies from multimedia software to social networking firms (Tianya.cn, investment by Google in August) to peer-to-peer sharing networks (China's Xunlei Network Technology Co, investment by Google in January), as well as partnering up with some larger internet portals, such as Sohu.com.
Some analysts say Chinese internet sites will always have domestic cultural advantages over Google, Yahoo! and MSN. What do you think?
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