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7/31/2019 17143002 Google Problem in China
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INTRODUCTION
GOOGLES PROBLEMS IN CHINA
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Dhananjay kumar
Jaipuria institute of
management, noida
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BACKGROUND NOTE
Larry Page(Page ) and Sergey Brin (Brin) were the founder of GOOGLE.
It was started to came in existence when these two boy were student at StanfordUniversity ,California ,USA.
Together they started working on backlinks and called the project BackRub.
They created a ranking system which ranked the links depending on there importance.
They discovered an algorithm called PageRank.
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Larry Page & Sergey Brin- the Founders of Google
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CONTINUE
BackRub used PageRank to sort the results and placed the most relevant resultsat the top.
The duo named the search engine Google(after googol or 10 to the power 100).Released its first version on the website of Stanford University in August 1996.
Encouraged by the co-founder of YAHOO! , David Filo they decided to opentheir own company .
One of the co-founder of Sun Microsystem ,Mr. Andy Bechtolsheim who wasvery much impressed by the potential of venture handed over a check forUS$100,000 in favor of Google Inc .
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Google opened its first office in Menlo Park , California in September 1998.
By December, 1998,Google was named One of the top 100 websites and search enginesfor 1998 by PC Magazine .
By February 1999, Google had a staff of eight and was answering more than 5,00,000queries a day.
By 2000, Google had 60 employees and by June 2000, the company had an index of OneBillion pages ,becoming the largest search engine in the world.
Google started generating profit from the beginning of the fourth quarter of 2001.
Google has an agreement with AOL in mid 2002 according to which ,Google provided AOL
with search results and AOL placed banner advertisement from Google on its websites.
BY Feburary 2004 ,Google had around 6 billion items including web pages and images .
On August 2004, Google came out with its First Initial Public Offer(IPO) and raised US$1.2Billion.
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January 25 , 2006 , the US based Google Inc . (Google ), the worlds
largest search engine censored the content that it made available inChina.
Earlier Govt. Agencies in China used to censor the content on Googles Site
that violated the regulations.
Googles view was that after censoring the companys website would
become easily accessible in China.
The company announced , In order to operate from China ,we have removed
some content from the search results available on Google.cn, in response tolocal law , regulation or policy.
There was displeasure among the human rights activists who advocates thefreedom of the press all over the world .
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Source: Bear Sterns
http://www.wikinvest.com/image/Chinaonlinemarketingbaidu.jpg7/31/2019 17143002 Google Problem in China
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GOOGLE IN CHINA
In September 2000, Google began operating a search engine in Chinese by offering 24 million
web pages in Chinese languages .
By 2002, Google had gained popularity in China owing to its simplicity and ability to carry outsearches effectively.
At that time Chinese Government was blocking several websites through IP filters intermittently .
Blocking increased during times of heightened security like the anniversaries of Tiananmen Squareevents, the national party congress ,etc.
Early September 2002, a new filtering system based on keywords was introduced by the Chinesegovernment .
Filtering Software was installed at four public access networks that blocked access to websites includingGoogle.
By 2003, Google was ranked #1 in Chinas search engine market with a share of 34.8%.
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CONTINUE
Google announced that users would be informed whenever accesswas restricted.
According to China Internet Network Information Center in August2005- Google was losing market share to its competitor Baidu.com.
Googles content had to pass through Chinese firewalls which stalled
the server and slow it down .
Slowdown was associated with filtering and censorship carried by
the chinese government and Internet Service Provider (ISPs).
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GOOGLE LOSES MARKET SHARE
By early 2004, users in China started believing that Google was unreliable andstarted using alternative search engines.
According to Googles Communication and Public Affairs , Vive President ,Elliot Schrage
Google was seven times slower than its rival Baidu. Google was not at all happy with the
way its services operated in the country.
When Google was market leader in market in 2003,Bidus market share in market was just
2.5% of the internet search market.
By 2005, Google share was below 30% while Baidus share market share was at 46% and latter's
share was growing at the rate of 10% at various prominent cities in China.
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Baidu a domestic search engine of China emerged as the biggest rival of
Google by the beginning of 2004.
Fig: Internet Market in China
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Reasons for Google losing its Market
Share to Baidu:
Speed
Baidu was Faster than Google.
Google was found to be 7 times slower than Baidu.
Services
Offered
Baidu offered downloadable online music service.
Google was searched for business opportunities & enterprise products.
Users
Baidu had the biggest group of Internet users in China in its favor- theStudents. (Mass popularity)
Google was mostly used by high-end, well educated people. (Limiteduser-base in comparison to Baidu)
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Source: Company Data
http://www.wikinvest.com/image/BaiduRev.jpghttp://www.wikinvest.com/image/BaiduRev.jpg7/31/2019 17143002 Google Problem in China
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Source: Company Data
http://www.wikinvest.com/image/BaiduRevenueMix.jpg7/31/2019 17143002 Google Problem in China
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FORBIDDEN SEARCHES IN CHINA
Tiananmen Square It is a public place in Beijing, China and is the largest open urban area in the
world.
Between April and June1989 the square witnessed student led demonstration
demanding freedom for press , which was soon joined by intellectuals and urban
workers.
Protester defies government call to disperse. On June 4,1989,army tanks and infantry were sent to Tiananmen Square to crush
the protests.
This resulted in death of around 2500 civilian , while some source claimed it was
around 5000.
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FORBIDDEN SEARCH CONT
Falun Gong Founded by Li Hongzhi , Falun Gong is a system of qigong(aspect of chinese
medicine involving the coordination of different breathing patterns with various
physical postures and motions of body).
It advocates practice of five sets of meditation exercises , introduced in China in
1992. By late 1990s it gain popularity all over the world.
In 1999, the government of China started suppressing Falun Gong referring the
practice as evil.
Tibet Independence/Dalai Lama Tibet which is under control of china is considered as an illegitimate military
occupation by Tibetans loyal to the Dalai Lama
Dalai Lama flee from Tibet in 1959 , and settled in India.
As of 2005, Tibet is seeking an autonomous status similar to Hong Kong
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THE LAUNCH OF GOOGLE.CN
Due to huge customer base ,to operate in China ,Google needed an Internet Content Providerlicense ,which required it to filter its content.
In April 2005 , Google obtain permission from Ministry of Information Industry in China ,to operatein China.
Google opened a representative office in Shanghai(Mainland China), and registered the URL-www.google.com.cn. Google also started its China R&D Center by the third quarter of 2005.
Google maintained its stand on protecting user privacy by storeing the search records fromgoogle.cn , outside the country.
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CONTINUE.
Google was filtering its results which was against its policy, in order to reach Chinese users effectively,and the company decided to agree to Chinese Governments terms and condition, which includedChinas local content restrictions.
In January 2006 , google.cn was officially launched .
Google placed disclosure on all pages from where the search results war filtered out.
Due to earlier office in Hong Kong ,it was limiting Googles ability to provide advertising services tocompanies. So, in October 2005 Google launched its sales and business development activities inChina.
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POLITICAL FACTOR
Government(Still work
on the ethics of
communist).
Protecting the Domestic
Firms(Some way ofshowing PROTECTIONIST
GOVT.)
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CULTURAL FACTORS
Chinese give more values
to Chinese products .
Restricted Culture .
Openness doesnt fit inChinese Culture .
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DEMOGRAPHIC FACTOR
Age Group 15-64 - Population 71.9%
Urban population - 42.3%
Rural Population - 57.7%
Urbanization Rate - 60% - 65%
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TECHNOLOGICAL FACTOR
FIREWALL
ICP(INTERNET CONTENT
PROVIDER):
Sensitive Content restriction
in China
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SOCIAL FACTOR
Tiananmen Square
Independence Of Tibet(Considered as an illegitimate military occupation by
Tibetans loyal to Dalai Lama.
Tibet is seeking an autonomous status similar to Hong Kong.
Falun Gong
Suppression Of Human Rights(Like freedom of speech , freedom
of association .
Provoking way of Human Right Watch(A US based NGO ).
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QUES1: Google has
announced that it will becensoring its search
content for its Chinesewebsite .Is Google taking
the right step? How couldGoogle benefit from thismove? Do you think it will
adversely affect the
company in other markets
in which it operates ? Take
a stand and justify youranswer.
QUES:2 Google has
been losing market shareto Baidu in recent years .
What strategies should
the company do to regainmarket share in the
Chinese Internet searchengine industry. Discuss.
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Advantages
Easily accessible & fast service
Local presence
Opportunity of Business advertising
Support of Chinese Government
Opportunity of growth , making the credibility of chinese people
Strong position than Baidu
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Effect on the other market
1. Users loyality of the Google in other Countries
Google s mission statement- Our mission is to organize
the world s information and make it universally accessible
and useful .
2. Against of human right-activites and advocates offeedom of the press all over the World
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Question.2. GOOGLE has been losing market share to BAIDU in recent year. Whatstrategies should the company adopt to regain market share in the Chinese internet
search engine industry? Discuss.
80 percent Chinese
youth in Shanghaibetween ages of 18and 24 used Baidu
as their primarysearch engine than
Google.
Reasons behind losing share :
1. Bizarre hiring practices.
2. Slow and difficult to connect.
3. Service and productoffering.
Ans: LOSING MARKET SHARE-
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PRODUCT AND SERVICES FOR USERS
Source: Credit Suisse
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CUSTOMER SATISFACTION
Sources:www.metrics2.com
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Strategies to regain marketshare
Google has failed for much more prsaic reasons. If Google can change some of itsoutdated practices then it will do very well in China.
Some are as follow :
Improving and enhancing product & services
1..online music services ,like. Mp3 and other media files
2. Faster and easily connectivity
Right management team in place , delegate authority to them and localize services.
Follow the Government rule
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Answer
Google is actually choosing to censor itself in
accordance with a constantly updated list of
unacceptable term to Chinese Government
The Company agreed to the censorship because
even if it had provided uncensored contents thecontent was filtered at the ISP level and users could
only access that content which was approved by the
Government
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Economic Benefits to China:
Revenues from Googles operations will contribute to Chinas GDP &GNP.
Googles entry & simultaneous expansion in China will contribute to
better International Relations & Foreign Trade (bringing in moreFOREX reserves).
Openness & Competitiveness of China in International Markets will beenabled through entry of more foreign firms (like Google & Yahoo).
China will display a favorable Business Environment for entry of moreInternational firms (provided, the Law of the Land is not very rigid &
can be moulded in the firms favor.)
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Bibliography:
www.google.cn
www.baidu.com
Wikipedia
Credit Suisse
www.metrics2.com
http://www.google.cn/http://www.baidu.com/http://www.baidu.com/http://www.google.cn/7/31/2019 17143002 Google Problem in China
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