Recruiting in China

Jake at Demo China has an important article on Google's market share in China with plenty of back-up links. Google continues to fall behind China's premiere search engine Baidu. Two research groups show about a 13% increase in Baidu search trsaffic and a 12.3% drop for Google searches in Beijing. The stats seem to be consistent with data mined in other parts of China.

The data does not surprise me as Google pays little attention to the unique needs of Chinese users. The sad part for Chinese users is: Baidu's top search results are pretty much bought and paid for by advertisers; so, the average netizen is not getting an honest cyber-portrait of the best site for his query. And expats and tourists to China are more likely (based on my personal un-scientific study involving 25 new visitors and 15 fossilized expats) to use Google to find services and businesses in their area. And they would get infinitely better results by using Google or Yahoo!: type in Embassy phone numbers China and none of the top 10 entries will get you to a consular officer. In contrast, Google gives you 7 official and unofficial sites that will help those in need of a bureaucrat.

And I think Baidu's numbers will mislead businesses that cater to foreigners. Advertising dollars that could bring them real traffic from customers with disposable income will likely be diverted to an ineffective Baidu. And Baidu is as expat friendly as Google is attractive to Chinese Nationals. Google spent a Googol last year on market research (100 times more than Baidu), but did it from the comfort of their California home. Baidu does not have to get off the couch as they have the confidence, whether worthy of it or not, of Chinese netizens and advertisers.

A funds manager in New York asked me last year asked me why I believed that Baidu would outdistance Google in China when it paid so little to understand the marketplace. I predicted that Google would flounder based on the ancient Chinese pronciple of Guanxi (literally: relationships, but far deeper in meaning) that so far, only Bill Gates has done a good job of understanding. According to Robert Buderi and Gregory Huang in Guanxi: The art of relationships: Microsoft went at the problem of opening up the China market in a way that was a departure for most Western companies. Instead of focusing on sales or cheap manufacturing possibilities, Bill Gates imagined tapping into China’s vast pool of talented computer science students and harnessing their energy in a way that would be mutually beneficial to Microsoft and China. He visited China’s top leaders repeatedly over the years, building a relationship and opening doors. He practiced Guanxi, a Chinese term that conveys trust and mutuality. Says Huang, the “most important principle is that relationships must be nurtured over time. They can’t be bought or rushed.”

I have not agreed with Google or Yahoo's policies since they came to China, but along MSN, I rely on their accuracy in reporting. But, if they are going to stop the economic bleeding they had better find a vendor of Guanxi fast and take a double dose just for good measure. And Baidu had better wise up before someone actually tries marketing a home-grown engine with a touch of honesty.

by Lonnie Hodge