Media & Entertainment

Google will struggle if it re-enters China, says its former country head

Comment

The odds are stacked against Google if the reports are true and the company is trying to bring its services back to China, according to the former head of Google China.

News reports last month uncovered details of internal plans to introduce a search product and a news app in China, moves that would mark a re-entry to the consumer market which Google left in 2010. The plans, which follow a noticeable increase in activity in China from Google, were widely criticized by activists and also raised concern internally from Google employees.

Kaifu Lee left the search giant nine years ago following a four-year stint, and today he’s best-known as one of the world’s leading thinkers on AI and the founding partner of Chinese VC Sinovation Ventures. Speaking at TechCrunch Disrupt San Francisco this week, he shared his belief that China’s tech ecosystem is rapidly catching the U.S. on AI — that also spills over into more general tech, and the kind of competitors that Google would face were it to return to China.

“I think re-entry is always difficult,” Lee said. But “the bigger issue really is can an American multinational succeed in China now that China has bifurcated into this parallel universe.”

Lee helmed Google’s China business in its battle against domestic search firm Baidu. He said that Google’s market share jumped from nine percent to 24 percent during his tenure, while total revenue was “approaching” $1 billion, but now the outlook in China is less rosy in 2018.

While he admitted that Google “should have a higher chance than any other company” at succeeding in China, he isn’t optimistic that it — or indeed any U.S. firm — can.

“People [in China] aren’t looking for a new search engine or an app store, new companies are emerging addressing previously unknown customer needs [and] innovations are coming out,” Lee explained.

“The new graduates generally prefer to work for Chinese companies and then, lastly, the heads of multinationals are really just professional managers. If they were to compete against local entrepreneurs who are gladiators in this colosseum, I don’t think the American companies will have a high chance of succeeding in this environment,” he added.

Google isn’t the only U.S. firm looking at China, of course.

Facebook briefly received approval for a China-based subsidiary — it was later withdrawn following media reports — while it has tested local products in the past and engaged in dialogue with regulators. Uber was more successful, but it famously spent more than $1 billion per year to compete in China before being sold to local rival Didi. The only companies that could be credited with not failing in China are LinkedIn, Evernote and Airbnb, and, in each case, the actual impact is debatable. Certainly, each has strong/stronger local rivals that remain active.

“I think any American company would have a hard time in China now, Apple being the single exception,” Lee said.” And I think that’s because [Apple is] mostly a hardware product and the product has become a fashion symbol… so that’s different.”

In the case of Google, the challenge is far different. Even local social media companies struggle to adhere to adequately police online content according to the whim of authorities. New media firm Toutiao, for example, had numerous apps temporarily suspended from local app stores, while it massively strengthened its content checking teams and made a public apology. Tencent, Alibaba and others also employ in-house teams to police the content and users on their platforms.

That’s a huge challenge without even thinking about finding the right product-market fit or engaging an audience.

China is beating the US on AI, says noted investor Kai-Fu Lee

More TechCrunch

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

2 hours ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

2 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

2 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more