Porn Row Won't Slow Google in China, Analysts Say
Google is likely to continue gaining market share in China despite a recent row with the government over pornographic search results, analysts said Wednesday.
China blasted Google last month for allowing links to porn to appear in its search results, and at one point briefly blocked Google.com and Gmail nationwide. State media played up the criticism, including in a widely viewed television news program that showed Google serving up links to erotic images.
But the smudge on Google's image is unlikely to harm its ad sales or its growth against domestic rival Baidu, China's dominant search engine.
Google's traffic actually got a boost when curious Internet users flocked to test the search engine after the scandal, said Li Zhi, an analyst at Analysys International, a Chinese technology consultancy. Traffic has since returned to usual levels, she said.
Google did lose small portions of some advertising budgets over concerns about the company's image, but those losses are likely to be temporary, Li said.
Baidu accounted for over 74 percent of Web searches in China in the first quarter, far above Google's share of almost 21 percent, estimates iResearch, a Chinese Internet consultancy.
Sex is more taboo in China than in the West. Sex education is rare, and while savvy Internet users can access anything online, the government blocks many erotic Web sites and sees pornography as an assault on traditional values. After China's warning last month, Google created an algorithm that it said now keeps most of the sensitive links out of its search results.
Some links to porn can still be found on Google's Chinese search engine or Baidu, though far fewer than in other countries.
The official criticism of Google will not have a major impact on advertising sales, said Shaun Rein, managing director of China Market Research Group in Shanghai.
Advertisers might avoid Google if they become worried that the search engine could be shut down, but that is unlikely to happen, said Rein. Advertisers have not given signs of those concerns so far, he said.
One Chinese news report cited an unnamed Google regional sales agent as saying second-quarter ad sales rose 25 percent over the first quarter. That growth rate was slightly higher than the first quarter, the agent was cited as saying in the report on local portal NetEase.
Google declined to comment.
Google's share of the Chinese user search market is likely to continue slowly rising, though probably at the cost of its smaller rivals rather than Baidu, Rein said.
Google has a mostly white-collar, urban user base in China. Users often go to Google for English searches but stick to Baidu for searches in Chinese, said Rein.
Google has gained traffic from the free music download search it offers only in China. Google greatly expanded the service this year, and now Chinese users can use it to find free, licensed downloads of songs from artists like Michael Jackson, Madonna and Taiwanese pop star Jay Chou.
The music search saw "very fast development" after its expansion and drew 22.4 million hits in April, iResearch said in a report last week. Over half of its users were under 25 years old, markedly younger than Google's user base for normal Web searches in China, according to iResearch.
Google launched its music search partly to win over more young users. It competes with a similar service on Baidu that analysts say gives the Chinese company a substantial portion of its traffic.