Google Quickly Reverses Course On Flying Solo In China

from the not-going-it-alone dept

Fri, Dec 29th 2006 5:34am — Joseph Weisenthal

Although the large Chinese market seems to hold a lot of promise for American internet companies, there's no doubt that most of the big ones seem to be struggling there. eBay recently waved the white flag, admitting that its China business was basically going nowhere. Google, too, has failed to see the same success in China as it's had elsewhere around the globe. The company was an early investor in market leader Baidu.com, but pulled out to focus on Google China, which remains a laggard. Still, just last week, the head of its China operations, Kai-Fu Lee, insisted that the company would not partner with any domestic companies, as Yahoo did with local firm Alibaba, last year. Well, Google's solo ambitions didn't even last until the end of the year, as the company has invested in video download firm Xunlei. Considering how much money Google's already invested in the video space, it's a testament to the difficulty of the Chinese market, that Google still felt the need to invest in a regional player. And if the company is willing to abandon its go-it-alone strategy in video, it seems likely that they'll do the same in other areas, if they don't start to gain any traction.

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18 Comments

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Protoplasm, 29 Dec 2006 @ 6:57am

Emerging or Hemoraging markets?
What's it going to take, 3 billion Chinese can't develop their own?
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buckweat, 29 Dec 2006 @ 7:11am

I don't get it.... what the hell is this article trying to say? What is google trying to do with China?
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KFL, 29 Dec 2006 @ 7:31am

psst
It's Kai-Fu Lee, not Lee Kai-Fu.

Yeesh.
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Anonymous Coward, 29 Dec 2006 @ 7:58am

White Elephants
Isn't that what coporations have always done? Killing off profitable businesses at home and wasting them on "lucrative" projects abroad?
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Chuck, 29 Dec 2006 @ 8:04am

China sucks
These crafty dog and cat eaters are not to be trusted.

THEY ARE STILL COMMITTED TO COMMUNISM AND THE DESTRUCTION OF THE USA.

Last month the Russian Government demonstrated how governments let foreign businesses transfer technology and assets and when the business is up and running they just take everything and kick the foreign investor out on his ass. Shell Oil has all of it's natural gas investment in Russia just taken away, a $20 billion dollar investment. This is where Google is headed. They have not been successful because they are being blocked until the commies can get under the hood and see the engine and how it works

Without American innovation born of our open society and free markets, they can only steal out ideas and sell them back to us after producing them with human fodder paid a sub-existence wage.

It is time for us to tariff Chinese goods until they peg the RNB to the dollar, clean up their environment, respect human rights, respect intellectual property, and stop putting Lassie and Tabby on the butcher's block.
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Anonymous Coward, 29 Dec 2006 @ 8:11am

Re: China
What is Google trying to do with China? It's what China is trying to do with Google.
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Anonymous Coward, 29 Dec 2006 @ 8:47am

interesting that you put human rights alongside intellectual property and different diet.
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Unknowledgeable Geek, 29 Dec 2006 @ 8:47am

What
How does communism mean the destruction of America. I am just confused.
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Ricky, 29 Dec 2006 @ 8:54am

But Chuck
But I love Tabby stew, on a cold winters day.
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Idiot at Large, 29 Dec 2006 @ 9:30am

Commies
What about Poodle Noodle stew?
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Chris, 29 Dec 2006 @ 9:31am

China isn't communist, they're not even Taoist communists, just as the United States isn't a democracy. China's market is capitalist, but still heavily regulated by the government. Communism as I recall aims for a dissolution of wealth, but there's still a huge caste difference between the absurdly wealthy and the extremely poor. The government still censors the news, and bans religion, plus many schools of thinking. For a company like Google or the like to try and operate in China, when they're already running into restrictions left and right, it's hard to see how they can truly offer something new that the government hasn't either provided already, or given exclusive rights to someone else. I fail to see how the Chinese government would allow any sort of new product, or content to be distributed to its citizens, so for these companies the only thing they can offer is a new means of obtaining what the public has had for years; censorship.
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Joe, 29 Dec 2006 @ 9:38am

Re: psst
Thanks for the catch, corrected.
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JS Beckerist, 29 Dec 2006 @ 10:22am

a wise man once said...
Chuck, you are wiser than even you know.
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Anonymous Coward, 29 Dec 2006 @ 11:39am

wow chuck...your mind is still trying to keep up with the politics of the 1970-80's...
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Bill, 31 Dec 2006 @ 3:58pm

Hold Out
Nothing will happen in China until there is a major shift in politics. I think it is wise for a company like google to hang in there. Something has to eventually break free.
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chain saw, 3 Sep 2007 @ 6:59am

hat do they do in China
The Chinese market is just too different to the Western market for standard e-commerce and internet companies to exist. What it's going to take for them to make money there, though, is really anyone's guess. What the average Chinese person does is probably still a mystery to most of us – here I am, on the web, and it's a part of my job. There, it seems that whatever kind of work needs to be done isn't internet focused or based, or uses the internet in any way. This is interesting. Perhaps most of the country is still rural... I'm not sure. It seems even those that should be 'in the know' aren't sure either!
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jewellery, 12 Oct 2007 @ 11:59am

Google in China
China always seems to provide a very difficult market, especially when you’re talking about the internet because of the way things are censored and controlled there. I do wonder about eBay and why they failed – one would think that an auction site would do well no matter where it is, but perhaps there’s something about the Chinese mindset and the way they’re used to shopping that caused its demise? Anyway, I think it’s very interesting that Google is changing their strategy and approaching China from a different angle. Perhaps that’s why they’re one of the most successful search engines out there. They aren’t afraid to change strategies and try something new when they’re failing. I wonder which market we will see Google invest in next. They’ve already conquered most of Europe, and the US is on board….I just wonder why Google didn’t set out to partner with existing companies in the first place. It seems to be more beneficial in the long run.
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Pet portrait artists, 7 Jan 2008 @ 10:24pm

China and Google?
I was really surprised that Google trusted China. A lot of countries have banned China from their marketplace. In addition to contaminated contents in their products, China has proven to be really dishonest towards their services and products.
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