Google Problem In China

Presented By:
Dheeraj Joshi Navin Kumar Arti Prajapati Munish Kumar Syed Mazhar Aman Kumar

About Google
Larry Page and Sergey Brin were the founder of GOOGLE. It was started to came in existence when these two boy were student at Stanford University California, USA. Together they started working on backlinks and called the project BackRub. They created a ranking system which ranked the links depending on there importance. They discovered an algorithm called PageRank.

Larry Page & Sergey Brin - the Founders of Google

Contd
Google opened its first office in Menlo Park , California in September 1998. By December, 1998,Google was named One of the top 100 websites and search engines for 1998 by PC Magazine . By February 1999, Google had a staff of eight and was answering more than 5,00,000 queries a day.
By 2000, Google had 60 employees and by June 2000, the company had an index of One Billion pages ,becoming the largest search engine in the world.

Google started generating profit from the beginning of the fourth quarter of 2001.

Google has an agreement with AOL in mid 2002 according to which ,Google provided AOL with search results and AOL placed banner advertisement from Google on its websites.

By Feburary 2004 ,Google had around 6 billion items including web pages and images .

On August 2004, Google came out with its First Initial Public Offer(IPO) and raised US$1.2 Billion.

Google Meets The Great

Firewall

January 25 , 2006 , the US based Google Inc. (Google), the worlds largest search engine censored the content that it made available in China. Earlier Govt. Agencies in China used to censor the content on Googles Site that violated the regulations. Googles view was that after censoring the companys website would become easily accessible in China. The company announced, In order to operate from China, we have removed some content from the search results available on Google.cn, in response to local law, regulation or policy. There was displeasure among the human rights activists who advocates the freedom of the press all over the world .

Google In China
In September 2000, Google began operating a search engine in Chinese by offering 24 million web pages in Chinese languages . By 2002, Google had gained popularity in China owing to its simplicity and ability to carry out searches effectively. At that time Chinese Government was blocking several websites through IP filters intermittently . Blocking increased during times of heightened security like the anniversaries of Tiananmen Square events, the national party congress, etc. Early September 2002, a new filtering system based on keywords was introduced by the Chinese government . Filtering Software was installed at four public access networks that blocked access to websites including Google. By 2003, Google was ranked #1 in Chinas search engine market with a share of 34.8%.

Contd.
Google announced that users would be informed whenever access was restricted. According to China Internet Network Information Center in August 2005- Google was losing market share to its competitor Baidu.com Googles content had to pass through Chinese firewalls which stalled the server and slow it down. Slowdown was associated with filtering and censorship carried by the Chinese government and Internet Service Provider (ISPs).

Google Losses Market Share

By early 2004, users in China started believing that Google was unreliable and started using alternative search engines.

According to Googles Communication and Public Affairs , Vive President ,Elliot Schrage Google was seven times slower than its rival Baidu. Google was not at all happy with the way its services operated in the country. When Google was market leader in market in 2003,Bidus market share in market was just 2.5% of the internet search market.
By 2005, Google share was below 30% while Baidus share market share was at 46% and latter's share was growing at the rate of 10% at various prominent cities in China.

Baidu a domestic search engine of China

emerged as the biggest rival of Google by the beginning of 2004

Reasons for Google losing its Market Share to Baidu

Speed

Baidu was Faster than Google. Google was found to be 7 times slower than Baidu.
Baidu offered downloadable online music service. Google was searched for business opportunities & enterprise products.
Baidu had the biggest group of Internet users in China in its favor- the Students. (Mass popularity) Google was mostly used by high-end, well educated people. (Limited user-base in comparison to Baidu)

Services Offered

Users

Market Share-Online Search Market In China (June 2005)

Forbidden Search in China

Tiananmen Square
It is a public place in Beijing, China and is the largest open urban area in the world. Between April and June1989 the square witnessed student led demonstration demanding freedom for press , which was soon joined by intellectuals and urban workers. Protester defies government call to disperse. On June 4,1989,army tanks and infantry were sent to Tiananmen Square to crush the protests. This resulted in death of around 2500 civilian , while some source claimed it was around 5000.

Contd.
Falun Gong
Founded by Li Hongzhi , Falun Gong is a system of qigong(aspect of chinese medicine involving the coordination of different breathing patterns with various physical postures and motions of body). It advocates practice of five sets of meditation exercises , introduced in China in 1992. By late 1990s it gain popularity all over the world. In 1999, the government of China started suppressing Falun Gong referring the practice as evil.

Contd.
Tibet Independence/Dalai Lama
Tibet which is under control of china is considered as an illegitimate military occupation by Tibetans loyal to the Dalai Lama Dalai Lama flee from Tibet in 1959 , and settled in India. As of 2005, Tibet is seeking an autonomous status similar to Hong Kong

Legal Factors
The entities involve in regulating the internet include:
Central Propaganda Department , Department of Commerce GAAP (General Administration of Press and Publication ) Ministry of Culture , Ministry of Information Industry(MII).A foreign company cant hold ICP license . Ministry of Public Security Public Security Bureau State Administration of Radio , Film , and Television State Council Information Agency. State Secrets Bureau

Political Factors
Government(Still work on the ethics of communist). Protecting the Domestic Firms (Some way of showing PROTECTIONIST GOVT.)

Cultural Factors
Chinese give more values to Chinese products. Restricted Culture. Openness doesnt fit in Chinese Culture.

Technological Factors
FIREWALL ICP(INTERNET CONTENT PROVIDER) Sensitive Content restriction in China

Social Factors
Tiananmen Square
Independence Of Tibet(Considered as an illegitimate military occupation by Tibetans loyal to Dalai Lama. Tibet is seeking an autonomous status similar to Hong Kong.

Falun Gong
Suppression Of Human Rights(Like freedom of speech , freedom of association . Provoking way of Human Right Watch(A US based NGO)

Look At this Pic

The Launch of Google.CN

Due to huge customer base ,to operate in China ,Google needed an Internet Content Provider license ,which required it to filter its content. In April 2005 , Google obtain permission from Ministry of Information Industry in China ,to operate in China. Google opened a representative office in Shanghai(Mainland China), and registered the URLwww.google.com.cn. Google also started its China R&D Center by the third quarter of 2005. Google maintained its stand on protecting user privacy by storeing the search records from google.cn , outside the country.

Contd.
Google was filtering its results which was against its policy, in order to reach Chinese users effectively, and the company decided to agree to Chinese Governments terms and condition, which included Chinas local content restrictions. In January 2006, google.cn was officially launched. Google placed disclosure on all pages from where the search results war filtered out. Due to earlier office in Hong Kong, it was limiting Googles ability to provide advertising services to companies. So, in October 2005 Google launched its sales and business development activities in China.

Ques-1
Google has announced that it will be censoring its search content for its Chinese website. Is Google taking the right step? How could Google benefit from this move? Do you think it will adversely affect the company in other markets in which it operates ?

Answer
Easily accessible & fast service Local presence Opportunity of Business advertising Support of Chinese Government Opportunity of growth , making the credibility of Chinese people Strong position than Baidu

Effect on other market

1. Users loyality of the Google in other Countries Google s mission statement- Our mission is to organize the world s information and make it universally accessible and useful . 2. Against of human right- activites and advocates of freedom of the press all over the World

Ques-2
GOOGLE has been losing market share to BAIDU in recent year. What strategies should the company adopt to regain market share in the Chinese internet search engine industry? Discuss.

Ans: LOSING MARKET SHARE-

Reasons behind losing share : 1. Bizarre hiring

practices.
2. Slow and difficult to connect. 3.

80 percent Chinese youth in Shanghai between ages of 18 and 24 used Baidu as their primary search engine than Google.

Service and product offering.

Strategies to regain market share

Google has failed for much more prosaic reasons. If Google can change some of its outdated practices then it will do very well in China. Some are as follows:
Improving and enhancing product & services 1. Online music services ,like. Mp3 and other media files 2. Faster and easily connectivity
Right management team in place, delegate authority to them and localize services.

Follow the Government rule

Contd.
Google is actually choosing to censor itself in accordance with a constantly updated list of unacceptable term to Chinese Government The Company agreed to the censorship because even if it had provided uncensored contents the content was filtered at the ISP level and users could only access that content which was approved by the Government

Economic Benefits to China

Revenues from Googles operations will contribute to Chinas GDP & GNP.

Googles entry & simultaneous expansion in China will contribute to better International Relations & Foreign Trade (bringing in more FOREX reserves). Openness & Competitiveness of China in International Markets will be enabled through entry of more foreign firms (like Google & Yahoo). China will display a favorable Business Environment for entry of more International firms (provided, the Law of the Land is not very rigid & can be moulded in the firms favor.)

The Road Ahead

According to findings in January 2006, Google was in strong position to challenge Baidu in the Chinese search engine market. A study reveals that ,once Chinese users started using Google, preferred it to any other search engine market. Google entered the Chinese market only after considering its business prospects and it promised to translate this into increased market share, due to its strong resources and focus on the market.

Any Queries

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