Sunday, June 20, 2004

Google Takes Stake In Baidu; Positions For Battle With Yahoo! In China

China Business Strategy
by Paul Denlinger
Posted June 16, 2004

Google has taken a minority investment position in Baidu, a Chinese player in the keyword advertising market. Up until now, Google has had trouble penetrating the Chinese market because of Chinese government regulations of the media content market. The exact terms and amount of the investment were not disclosed.

Baidu would be Google's first announced investment in the Chinese market. While Google is popular among Chinese users, and is established as a brand with urban users, it does not have an official presence in China. Google does not have any sales presence in China, even though it offers Chinese keywords for bidding on its website.

With more than 60 million Internet users in China, Google realizes this is the place to be. They would have a tough time competing with Baidu and obviously realized if you can't beat 'em join 'em. This will give a boost to the search engine landscape in China and we may see things shaken up as other big players grab of a piece of the fsst growing market with 1.3 billion people. dt

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