David Prosser: Why Google deserves the applause
Thursday 14 January 2010
Outlook There has been a degree of cynicism about Google's threat to withdraw from China, with the company's critics pointing out how little money the search engine makes there. Of Google's $22bn revenue last year, just $210m came from China, estimates the researcher Analysys International. With Google earning less than 1 per cent of its money in China, pulling out is no great blow, you might say, especially given the credit it will earn from the gesture in many other parts of the world.
That is unfair. If Google really isn't bothered about doing business in China, why has it been prepared to take so much flak in recent years on its willingness to self-censor in the country? The company's stance on China has been the single biggest threat to its reputation as a force for good – hardly a price worth paying if this market isn't important to Google.
No, Google recognises that China, with 300 million internet users, has massive potential. It has made great strides in the country – last year's revenues may have been small in comparative terms, but they were 10 times larger than the sales Google made in 2006.
Moreover, while Baidu, China's domestic answer to Google, remains the biggest internet search player in the country, Google is catching up fast. In the first nine months of last year, Google averaged a market share of 30 per cent to Baidu's 62 per cent and is thought to have reached 35 per cent versus 58 per cent in the final quarter. The comparative figures in 2006 were 15 per cent for Google and 50 per cent for Baidu.
In these times of disenchantment with big business, assuming the worst about a company's motivations is all too tempting. But on this one, we should give Google the benefit of the doubt.
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