It has been a difficult market for Google from the beginning. The ethical questions in relation to censorship caused Google to hold back on services such as gmail for Google.cn whilst the NASDAQ listed Baidu.com continued to dominate the local search market.
Google’s traditional foe Yahoo is only just on the radar in China. Although rated in a 2006 market share report as being China’s No. 3 search engine, market share as of June 2006 was a low 5.7%. If Alexa data can be trusted, Yahoo.cn has since slipped to 7th place on traffic behind Baidu.com, 163.com (powered by Google, 2), Sohu.com (3), Google.cn (4), SoSo.com (powered by Google, 5) and Sina.com (6). It should be noted that a number of sites, such as Sina.com compete not only in search but services as well, Sina.com being best known in the West for offering a blogging platform.
Google’s China partners Soso.com and 163.com also use Google’s Adwords advertising platform. Google previously held a 2.6% stake in Baidu.com which it sold in 2006.
The importance of China to Google should not be underestimated. China has around 150 million people online and is expected to have more broadband users than the United States in the next 12-24 months.