Google Losing in China as New Users Go to Baidu

Google's share of the online search market in China has slipped this year and will continue falling because Baidu is more popular among new Web users in the country, a government report said late Monday.

Google, which has struggled to steal market share in China from dominant local rival Baidu, was the first-choice search engine for just 12.7 percent of search users at the end of last month, a fall of 3.9 percentage points from last year, according to a report by the China Internet Network Information Center, China's domain registration agency. The same figure for Baidu was 77.2 percent, up 0.3 percentage points, it said.

Google users who called the search engine their first choice also switched to another search engine more readily than Baidu users did, it said.

"Google has subpar usage and first-choice rates among new Internet users," the report said, predicting a further rise in Baidu's dominance next year. "As the number of Internet users quickly grows, Baidu's first-choice users will continue rising."

The fall in Google's market share appeared bigger because the report separated out users of Google from users of a local search engine that was powered by Google until this month. The change had not occurred during the time period covered by the report, which said crunched the numbers separately to show future trends.

Just 6 percent of Chinese search users have tried Bing, the report said. But Microsoft's large user bases in Internet Explorer and Windows Live Messenger could eventually boost that number, it said. Internet Explorer is by far the most commonly used browser in China, and Windows Live Messenger is an extremely popular chat client in Chinese offices and Internet cafes.

China's fast-rising number of Internet users surpassed the size of the U.S. population to reach 338 million earlier this year. But much of China's population of over 1.3 billion remains offline, and new Web users increasingly come from less developed areas away from the country's prosperous coast. Google, which Chinese users often use to find English-language or work-related materials, is less popular among those users, said the report.

Google was more popular among high-end users than among the general population, while Baidu attracted users seeking entertainment features such as music downloads and video search services, the report said.

Google this year expanded a free music-download search service that it offers only in China to compete with Baidu. The Google service appears to have helped the company reel in young Chinese, but users reported less satisfaction with Google's music search than with its other services, the report said. Just one in three Google users accessed the company's music search, compared to nearly three out of four for Baidu users, it said.

Yahoo was the first choice for just 1.6 percent of Chinese search users, the same as at the end of last year, the report said. Yahoo competes with a set of local search engines for the small slice of China's search market not held by Google and Baidu.

Reports from Chinese consultancies put Google's share of the online search market between 20 percent and 30 percent in the second quarter.

The longtime chief of Google in China left the company this month to create an angel investment group and was replaced by two other executives in the company.

(IDG, the parent company of IDG News Service, is an investor in Baidu.)

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