Google is having a rough time in Sergey Brin's country of birth. In Russia, Google is in third place in terms of market share behind
Google is similarly struggling in China. China's market leading Baidu, the first Chinese company to be listed in the NASDAQ-100 index, commands 58.1% of the market. Although Google has made some progress in the last two quarters, it is still a distant second at 22.8% (down from 33% five years ago.) Baidu has deals in place with all the major Chinese web portals and many of the big US players including Microsoft. Like Yandex, they have better language aware search technology for their market. Baidu mixes paid search rankings with organic results, which makes partners happy, although this is obviously at the expense of search relevance. To keep things in perspective, Google is about twenty times larger in terms of market capitalization, but Baidu is the leader in a country with four times the population of the US and a rapidly growing economy. Yahoo is the 900 pound gorilla of the Japanese internet. It handles half of all searches, is the largest internet provider in the country, dominates online auctions, and enjoys a brand equity that far surpasses its US counterpart. Despite Yahoo Japan's successful diversification and dominance across the Japanese internet, Google is making headway. In 2007 Google's search share gained 7% putting it within 10% of Yahoo’s 47.4% market share. In 2006 the gap was 38.1%. Google is spending heavily on Japanese marketing and Japanese language search technology. A recent deal to bundle Google's search and other applications with DoCoMo's mobile platform is sure to help boost these numbers, especially given DoCoMo's recent deal with Apple making it Japan's iPhone carrier. Google's future in Japan appears brighter than in Russia or China. Interesting sidenote: In January Baidu debuted in Japan. It is spending heavily and seems determined to be a major player in the Japanese market. Unfortunately for Baidu, its overzealous web crawling lead to Baidu bots being blocked by many Japanese sites. Baidu claims its Chinese language specific search technologies will give it a leg up in Japan, where some of the same challenges apply. Time will tell if it can make the necessary tweaks to apply this technology to the Japanese language, which shares only one of its three writing systems with Chinese and is otherwise an unrelated language.
In South Korea, perhaps the most insular large Asian internet market, Naver controls 77% of the search market compared to Google's 1.7%! How is this possible? Largely because Naver's popular "Knowledge iN" question and answer platform has created an enormous repository of user generated locally relevant content. About 50,000 questions are answered every day. The Knowledge iN database has accumulated over 70 million entries making it an incredibly valuable resource. Naver can provide excellent answers to common questions like "What is the fastest train route between A and B?" or "What are the hottest night spots in Pusan?" Google is simply not a player in the Korean market. While Google is obviously spending considerable resources in Japan, why is it largely ignoring growing markets in Russia and South Korea? With the US economy floundering and the economies of Russia and China in overdrive, Google should consider buying local market leaders while they are still affordable.
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