Tuesday, June 12, 2007

Google-Sina in China

Google has teamed up with Sina, one of China’s largest portals. Google will now power Sina's search features in return for integrating its famed AdSense technology on to Sina’s pages. Also Sina's search traffic will be directed to Google and search ad revenues will be shared.

This may help both companies counter Baidu which has a commanding 55% search market share in China in opposition to Google's 21.7%. Both Google and Baidu are competing to sign up smaller websites for their traffic. Advertisers may be less willing to pay a higher keyword price at Baidu now that Google is a more creditable competitor.

The deal with Sina is Google’s largest in China and will increase Google’s market share in search traffic and search revenues.Google’s has so far has made a $5 million investment in China in P2P video site Xunlei.

China has the world's second-largest population of Internet users, with 137 million people online, and is on track to surpass the United States as the largest online population in two years. Though Google and Yahoo have been making inroads into China, domestic operators such as Sohu.com, Baidu and Alibaba held an obvious cultural and first-mover edge.

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