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Last Week in China – Myspace in China, Yahoo Faltering and Baidu Jumps the Sea of Japan

Some of the more noteworthy tidbits that happened in China last week, ok, in the last 2 weeks, as I was busy getting some sun and beach in Hainan for a couple of days.

Is MySpace really coming to China

Rupert Murdoch has his eyes set to bring the Social Networking website, MySpace to China. Together with IDG Technology Venture Investment, a venture-capital arm of the Boston publisher, and former China Netcom Group Corp. Chief Executive Edward Tian. Nothing is final yet as they are said to be still in talks. Murdoch’s Chinese wife, Wendi Deng, will probably join the board of the new venture.

Rumors of MySpace entering China have been on and off for some time now and one of the main issues will be how they will deal with the Chinese regulations that sometimes tend to change overnight.

From the Wall Street Journal

But MySpace, a Web site that lets users post their own videos, pictures and blogs online, could face stiff competition and regulatory hurdles in China. Other big U.S. Internet players such as eBay Inc. and Google Inc. have struggled to topple local rivals in China.

The regulatory climate for Web sites in China is uncertain. Over the summer, a Chinese government agency [SARFT] announced it was considering regulations against Web sites that broadcast short films without state permission. A person close to the MySpace China deal said, “People are still trying to figure out if social networking can work as a business in China.”

The state permission of needing a license is not likely to be a huge hurdle. There are already more than 150 social video websites, numerous blog providers and I don’t see that as the main decision breaker. More important is whether they can tailor MySpace to make it appealing to the Chinese audience and not copy paste the American version.

Baidu ventures out to Japan

Baidu has announced they want a piece of the Japanese market share and plans to start offering their Japanese search product in 2007. Baidu is the search engine of choice in China with Google trailing far behind.

From Reuters

The company said its decision, which followed a six-month study into Japanese-language search technology, was based on a high level of Internet use in Japan and some similarities between the Chinese and Japanese languages.

Current players in Japan are Yahoo, Google and MSN. Yahoo and Google have a combined market share of 90%.

There are several reasons why this branching out won’t be as successful as they may hope. Besides the very stiff competition, I don’t rule out some Japanese/Chinese sentiments will play a role for Japanese searchers to make their choice. Having said that, I also don’t rule out that these sentiments are part of the reason that Baidu decided to go into Japan. That last part is speculation on my side though. A remaining issue is whether Baidu will censor search results like they do in China.

Yahoo! China Looses CEO

Yahoo! is still trying to find its course in China. After serving 42 days as the CEO, Yahoo! China President Xie Wen has left “for personal reasons,”.

From Business Week

In what seems to have been a hastily written press statement cluttered with grammatical errors, Alibaba.com CEO Jack Ma said that Xie had resigned “for personal reason [sic].” (Alibaba controls Yahoo! China and is 40% owned by Yahoo!)

The reason for this is not 100% clear but it may have been that the company’s co-founder, Jerry Yang, didn’t like the strategy of the new CEO.

… many people who follow the industry believe that Xie left because he and Yang couldn’t see eye to eye about Yahoo! China’s future. Xie had proposed a change in focus for Yahoo! China, which has been struggling in the Chinese search market and is not a leader among the portals either.

Xie wanted to try a Web 2.0 strategy, addressing the exploding demand for user-generated content. Yang wanted to stick to the company’s portal model and, unimpressed by Xie’s strategy, forced him out.

The story continues to outline the missteps Yahoo! has made since entering China. An interesting overview.

Yahoo!’s market share is behind portals like Netease.com and Sina.com and it’s one of the smaller parties in search.

This wraps up the main news from China for the last 2 weeks.

One of the things I do since writing for SEJ is asking whoever I meet whether they use Google or Baidu and why. The last person, higher educated, uses Google. Not Google.cn but Google.com. He chooses Google as he feels the search results are more trustworthy than Baidu (Baidu mixes paid and natural search results without making a distinction) but at the same time mentioned that the connection to Google is not always optimal. China’s firewall, or the Nanny, as we call it here, keeps on giving Baidu the home advantage for the majority of the users.
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Gemme van Hasselt is an Internet Marketing Consultant, living in Shanghai, China. His musings on life can be found on China Snippets

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2 thoughts on “Last Week in China – Myspace in China, Yahoo Faltering and Baidu Jumps the Sea of Japan

  1. Thanks for the updates. You’re absolutely spot on that it can’t be a copy & paste job for MySpace in China. This is exactly why Google is having such a hard time in China with many missteps to date. Baidu rules because they truly understand the Chinese user.

  2. There is another issue. Baidu obeys all the ruls set by China goverment while google is hesitating. People almost can’t find sensitive materials such as Fa Lun Gong and Tian An Men Square in baidu.