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Google Wouldn’t Just be Leaving the Chinese Search Market

Posted on 15. Jan, 2010 by Daniel Cawrey in Features

It was clearly a strong point of deliberation between the leadership at Google on what to do related to last month’s intrusion into the Gmail accounts of a few Chinese activists. Apparently, Google CEO Eric Schmidt attempted to convince those around him that staying the course in China was the best route of action in response to what was a sophisticated attack on the company’s infrastructure in order to gain unauthorized access. Sergey Brin was most vocal about no longer censoring any search results at Google.cn, and based on the official statement, many other top-level executives agreed with him.

It makes sense that this topic would be a heavy point of deliberation. The Wall Street Journal reports that the Chinese market has 338 million internet users, more than any other country. And while Adsense makes up a majority of revenue for Google, in China the best engine of growth will most likely be in software and the mobile phone market as the company only has 36% of the search market, with local competitors like Baidu owning the lion’s share.

Since purchasing an iPhone product in China is so expensive, China Mobile, which is the country’s largest wireless operator, was hoping that the lower-cost Android would penetrate the market. That would be a problem if Google decides to exit the market entirely as China Mobile is a state-owned enterprise.

The fate of Android in China will most likely also seal that of Chrome OS as well. Seeing as how the country has a higher adoption rate for wireless technologies, Chrome OS smartbooks that are low-cost could potentially be a boon in the region. Unfortunately, there is now so much uncertainty in the Chinese market for Google because of this recent news that it’s hard to say where the market will go in China.

What will probably remain for Google is what other multinationals deal with in the Chinese market – a lot of knock of products. Home-grown versions of Chrome OS and Android could become a standard there. One thing is for certain: the components required to build devices that run Google’s software will still need to be made in Chinese factories.

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Tags: Adsense, android, China Moblie, Chrome OS, Eric Schmidt, Gmail, Google, Goolge.cn, iPhone, Sergey Brin