Google's future strategy in China includes acquisition plans for a number of Chinese companies, according to recent media reports. Local media has suggested that Google also plans to invest in several more local companies over the next year as a continued strategy to raise its position, and market share, above local rival Baidu.
"Over the next year, Google will acquire one or two companies in China, and invest in four to five companies," said Kai-Fu Lee, President of Google China, in a Chinese press report. He did not reveal the companies or technology that Google is interested in, and the leaked report has yet to be confirmed by Google itself.
Although Google dominates the search engine portal market in the United States, in China it trails behind the national search engine leader Baidu. Google has 21.7 per cent of China's search market, well behind Baidu's 55 per cent, according to market data company iResearch. Google's management executives have always stated that they offer competitive services to Chinese consumers and will eventually overtake the Chinese competitor.
"It's a very good start and although we don't think that this will result in an immediate huge success, we think that the tenacity of Google ... will bring significant victories in China over the next few years," Eric Schmidt, Google's Chairman and CEO, told analysts during a conference call last month.
If Google is really determined to become the number one search engine provider in China, investment is seen as an important strategy. In January, it took an unspecified stake in Xunlei Networking Technology Co. Ltd., a file-sharing website using a peer-to-peer system that is popular with Chinese users. Google also has a mobile search deal with China Mobile, the country's largest mobile operator, and has struck a search and advertising partnership with Sina Corp., China's most popular Web portal.
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