Google's Failure in China

Ever since China allowed the first internet connection to be established 16 years ago, global attention has been focused on how the web is changing the country.

To those in the west who saw the internet as an inherently open and free medium, it would only be a matter of time before censorship and authoritarian control succumbed to the inevitable.

At the forefront was Google, the world's richest media and internet company. The company thought that its local search service would be one of the main forces breaking down barriers to the free flow of information.

Google was wrong...they tried to impose their vision of the web onto China and lost sight of cultural preferences and social structures. Therefore, Google has struggled in China.

Google's Goofs

If Google does decide to actually leave China, it will accelerate the online divergence between China and the rest of the world already taking place.

With 384 million internet users, the country already accounts for more than one-fifth of the 1.73 billion global internet population.

For large American multinational companies like Google, that means adapt or lose a substantiative market.

Other American internet companies have failed miserably in China, notably Yahoo and Ebay, so Google is not alone in its struggles.

If Google leaves China it will be because they fumbled the ball and did not adapt to the Chinese market and its competitors like Baidu and Tencent Holdings.

Google ARROGANTLY took years to find out even some basic facts about Baidu – its Chinese rival, which has nearly two-thirds of the domestic market in online search.

For example, Baidu offers a search box formatted in a way much better suited to Chinese characters than Google's...yes, Google, Chinese people search in their own language.

In addition, Google was slow to tackle one of Baidu's main strengths in attracting user traffic – its free music download...Google only began offering a similar service last year.

China's Cyberspace

US companies have simply taken far too long a time to realize that Chinese people use the internet differently than their counterparts in other markets.

Recent research by the McKinsey consultancy suggests Chinese users spend most of their time online on entertainment, much of it playing online games, while Europeans and Americans are more focused on work-related uses.

Behind this difference is the fact that Chinese internet users are younger, poorer and less educated than their counterparts in the west – a result of the fact that the country is moving online at the same rapid pace as it is expanding its economy.

According to China Internet Network Information Center, 61.5 per cent of users are below the age of 29, and only 12.1 per cent have a university degree. Additionally, 42.5 per cent have a monthly income of $146 or less.

But there are also cultural differences which Google took a long time to figure out.

Chinese internet users do not like to type...perhaps due to the fact that Mandarin has many thousands of characters.

They navigate almost entirely by using the mouse...most Chinese portals have reacted by filling their pages with hundreds of colorful links competing for attention.....

This may look cluttered and disorderly to an American, but it makes life easier for Chinese users.

Chinese web users are also more active participants...for instance, the amounts of comments posted per user in China is double that of other countries.

It is how consumers communicate with each other China, as they discuss places to buy food or clothing, etc.

According to McKinsey, consumers are increasingly using blogs and other user-generated consumer reporting when deciding what to buy.

In China, word of mouth is trusted much more than marketing or advertising campaigns...western companies planning to sell their goods in China should keep this in mind.

Instead of slick ad campaigns, their money may be better spent in inviting “key” Chinese bloggers to test their wares and then blog about the products.

Despite government censorship, the internet is still the "freest" space in Chinese society.

Raised on a diet of propaganda in real life, many Chinese are mesmerized by the feeling of authenticity and empowerment that comes with user-generated content.

And the internet has a greater importance in China than it does in other countries, where it is simply another communication or information tool.

In China, through blogs and social networks, the internet is a crucial source of information suppressed in China's traditional media sources.

Bottom line - Google completely misread the Chinese market and culture. The company thought it would impose its vision of the internet on the country. Now that it has failed, it is waving the American flag to cover its lack of success.