Industry Analysis Case Study

Case Title:

Google vs Baidu.com (C): The Battle for China's Internet Search Market

Abstract:
From being an emerging economy, China is a surging one and the number of its Internet users is swelling. With that, the number of companies offering search services there is also going up. Google, the preferred search engine in many countries beats its rival Yahoo! by a wide margin. Yet, in China - forecast to be the largest Internet market in the world - Google finds itself upstaged by a local rival, Baidu.com. China's cultural nuances seem to completely elude Google. The company to find a foothold in China, is however, leaving no stone unturned. It has opened an office in 2005, hiring a Chinese at the helm. The company is working to improve its sales force. Along with this, Google in China has launched a censored Chinese version of its site in 2006, which is a first for the company. This case, the third in the series, Google vs Baidu.com, details the Chinese online search landscape along with the major players. The focus is on the ongoing battle between Google and Baidu, and the reasons for their failure and success respectively. The case facilitates a discussion on the critical success factors for search engines and the need for localisation. The business dilemma of choosing between ethical behaviour and shareholder wealth creation is also briefly dealt with. The case finally dwells on whether Google, after making changes to its approach, will be able to succeed in China and what should be its plan of action.

Pedagogical Objectives:

• The critical success factors for a search engine and whether these factors need to be localised
• The Chinese Internet search market and what makes it attractive to multinationals
• Why Google, otherwise the leading Internet search provider worldwide, is losing out in the Chinese market to a local player that has no presence overseas
• The business dilemma between ethical behaviour and what may be construed as foolishness by exiting a lucrative emerging market.

Keywords : Google; Baidu.com; China's Search Engine Market; Business Model; Industry Analysis Case Study; Globalisation and Localisation; CAGE Frame Work; Alliance Strategies; Acquisitions and Partnerships; Chinese Google; Government Business Environment; Internet Censorship; Online Advertising; International Business; Legal Environment and Regulations