Could Google Beat Baidu This Time Around In China With Dragonfly?

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Could Google Beat Baidu This Time Around In China With Dragonfly?

Google in China, circa 2006

Silicon Dragon

Will Google do better this time in entering China with Dragonfly, its project to bring a censored search engine back to China?

Google attempted to become the top search engine in China for nearly a decade and stopped without success in 2009. The global search powerhouse struggled in China with inferior search results, unreliable service, censorship issues and intense competition from Chinese upstart Baidu – by now a familiar story for many American brands in China.

The battle between Google and Baidu ignited in 2005 when Google set up shop in Beijing and recruited former Microsoft executive Kai-Fu Lee as its China president. Lee hired more than 100 Beijing-based engineers and linguists to improve Google’s Chinese search results. Google’s market share rose to 31 percent in 2009 from 21 percent in 2007.

But Google was one-upped by the local favorite Baidu, which had a superior search algorithm for the Mandarin language and innovations tuned to the local market such as incorporating social media chats and video clips into search. Baidu widened its market lead in Chinese search to 64 percent from 58 percent in mid-2007, as my book Silicon Dragon has chronicled.

Google, faced with continual blocks of its censored Chinese search engine and ethical concerns about censorship, withdrew from China in early 2010.  Dr. Lee left Google China in September 2009 to form Beijing-based venture firm Sinovation Ventures with a focus on AI and his own view (See AI Superpowers and related talk) that China is gaining on the U.S. in this critical technology.

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Today, Baidu commands 74 percent of the Chinese search market and is holding steady at more than 665 million search users while Google is totally blocked in China along with most of its products.

But, Baidu’s lead in the Chinese search market is not a given. The Chinese search engine faces e-commerce and social media rivals that bake search into their offerings. Alibaba’s search engine Shenma has ramped up to a 15 percent market share while Tencent has expanded search into its popular WeChat messaging service.

Baidu today has a two-pronged approach to the Chinese market: ramping up the search and artificial intelligence. It’s sold off non-core businesses such as group buying and food delivery.

Its Baidu App that offers search and tailored news feeds based on AI has reached 148 million users, up 17 percent from a year ago. Its Apollo self-driving technologies and line of voice-activated DuerOS speakers, lamps and projectors are gaining traction, despite the departure of COO Qi Lu who was running Baidu’s AI business. DuerOs has reached 90 million users for its smart hardware devices in homes and vehicles while Apollo has been launched on a fully autonomous mini-bus and a cargo delivery micro-car in China.

The question arises: will Baidu’s concerted push into AI take it off its search perch and leave an opening for Google to come in? That remains to be seen.

This year, Google stepped it up in China by investing in two Chinese tech businesses: Chinese live streaming and mobile game startup Chuoshou, and a much larger $550 million outlay in China e-commerce giant JD.com.

Google counts 1.7 billion daily mobile searches in more than 100 languages. Maybe Mandarin will be added soon.

 


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