After winning permission from China’s government to continue to operate in the country, Google must now fight for relevance as Baidu Inc extends its dominance in the world’s largest internet market.
Uncertainty over whether Google would be forced out of China, prompted some advertisers to switch to Beijing-based Baidu. Google had its licence renewed last week after it stopped automatically sending Chinese users offshore.
“There is a big gap between Baidu and Google, and that gap has got bigger,” said Vincent Kobler, managing director of Emporio Leo Burnett, a Shanghai advertising agency that specialises in online marketing. “It’s going to be tough for Google, even with the renewed licence, to gain market share.”
Google’s market share in China fell to 30.9 per cent in the first quarter from 35.6 per cent three months earlier, according to data from research firm Analysys International. Baidu’s share increased to a record 64 per cent from 58.4 per cent, according to Analysys.
“It won’t be easy for Google because its service has been diminished in the past few months,” said Jake Li, an internet analyst at Guotai Junan Securities in Shenzhen. “Baidu is likely to stay ahead.”
