Google China starts the year with a bang
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Google China starts the year with a bang

Arun Sudhaman

January is supposed to be a quiet month but, in my experience at least, it rarely is. Already, we've seen Kraft make the rather curious move of calling in post-merger counsel for a merger that may not happen. And, from what I understand, London 2012 last week held presentations for its global PR business. Interesting stories, but nothing quite compares to the Google China imbroglio. PRWeek Global has analysed the PR issues at play here, finding a sensitive and multi-faceted scenario which will affect Google, other foreign tech brands in China, and the country's own homegrown players. That, of course, is just one way of looking at Google's rather remarkable decision to potentially call a halt to its China presence. In truth, there are so many angles at play here, it is hard to imagine another media story from Asia topping this one this year. There are many who believe Google has only made this decision because its China operation has rarely looked like toppling the savvy market leader, Baidu. Perhaps. But Google is hardly an abject failure in the mainland. It counts around 35% of the search market. Not earth-shattering for a company that routinely clocks up double that proportion in other countries - but for a foreign internet brand, these are respectable figures. Of course, it shouldn't be forgotten - as Shaun Rein points out - that Google entered China as the market leader, only to be overtaken by the considerably more nimble Baidu. There have also been plenty of attempts to second-guess Google's decision - putting it down to the company's famously elastic 'don't be evil' motto. I'm inclined to take Google at face value - it simply can't provide the product it wants to in China. At a certain point, that becomes a significant operational issue for a company that places so much value in its reputation. Meanwhile, other issues come to mind - which I have not really seen explored fully yet. What does this mean for Google's Chinese partners, for example? Sina runs Google's search on its homepage, while China Mobile uses Android and Google Search for its smartphone range. Analysts are unimpressed. The sheer scale of China's internet market, makes any decision to pullout hard to quantify in financial terms. How will Google's move affect the maturity of China's search advertising market, though? The company has brought some much needed standards and transparency to the environment. Its absence cannot bode well for marketers and their agencies. Then there are questions over how China reacts to such a public snub. The country's charm offensive has made steady progress in recent years, but re-examination of its widespread media controls cannot help. Particularly coming so soon after a Copenhagen performance that attracted plenty of criticism. The US may have downplayed Google's threat, but this will also have implications for its ongoing relationship with China. Whether it also attracts the attention of the WTO, which has already tried to clamp down on China's media restrictions, is another matter.
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