Google Eyes Return, but Do Chinese Want it Back?

It’s not often that I agree with the People’s Daily, the official newspaper of the Communist Party, which has a way of politicizing even the most benign subjects that often seem to have little or no political angle. But one of the editorials that are its main bread-and-butter pretty much hit the nail on the head this week when it said that global search giant Google has become a “politicized brand” when it comes to the China market.

Google has been in the China headlines nonstop these past few days after a media outlet called The Intercept outed the company for a stealth plan to re-enter the local search market following an eight-year absence. The plan, complete with a cloak-and-dagger code name of Dragonfly, had Google developing a China-specific version of its popular search engine that would comply with Beijing’s strict laws requiring all internet companies to police themselves for — and remove — any politically sensitive content.

Google didn’t make any comment on the report, though it was quick to point out that it has begun to re-engage with China’s internet community over the last couple of years following the contentious closing of its original local search engine in 2010. Some of those re-engagement efforts include the launch of a local file management app, the rollout of a game, and the resumption of its efforts to support local developers of apps for its popular Android smartphone operating system.

Google’s own relative quiet on the matter hasn’t stopped just about everyone else from weighing in, culminating with the People’s Daily adding its voice to the debate. The newspaper’s editorial is rather long and just a bit smug, but is nicely summarized by a couple of sentences on its Twitter page saying: “Google is welcome to return to the Chinese mainland but it must comply with local laws. All foreign internet companies in China should respect China’s internet management.”

We actually haven’t seen a whole lot of Western voices speak up on the subject yet. I suspect that will come if and when Google ever officially launches its China search engine, which could come within the next six to nine months, according to The Intercept.

While that element of the story could clearly give Google some pause about such a China homecoming, the arguments in favor of such a move are quite compelling. To try and see what kind of reception it might receive, I did my own survey using the popular WeChat instant messaging service, and got results that show just why Google is willing to risk such big backlash. Money and influence are certainly at the heart of that decision. But a desire to provide some real choice to current dominant force Baidu Inc. also seems somewhat relevant, even though some might find it ironic that Google would be a proponent of choice given its somewhat monopolistic practices in other global markets where it operates.

Here it’s probably helpful to briefly retrace China’s online search history to understand the current landscape. When I first began reporting on the China internet in 2002, the market was still in its infancy and dominated by a company called 3721, which was purchased by a then-powerful Yahoo back in 2003. Yahoo proceeded to run 3721 into the ground, paving the way for the rise of Baidu and Google, the latter of which launched a formal China site in 2006.

Google would go on to boost its share from about 15% of China’s search market to about 30% by the time it left in 2010. But Baidu would do much better, growing from 47% to 64% over the same period.

Made-in-China roots

Much has been written about why Baidu managed to conquer Google in the early days. Most significant was probably Baidu’s background as a Chinese company, which meant it had far more resources to devote to perfecting a search service that could focus on China’s complex writing system and also the nation’s own unique online world. I also sensed there was a certain element of national pride involved, which was captured in 2010 when many ordinary Chinese treated Google’s withdrawal as a sort of coming-of-age for homegrown Chinese internet companies like Baidu.

Fast forward to the present, when much has changed for Baidu, which now controls a whopping 81% of China’s search market by revenue, translating to about 30 billion yuan ($4.38 billion) in this year’s first quarter, according to data tracking firm Analysys. But that dominance has bred a certain degree of complacency and even contempt in Baidu, which has developed a reputation for putting advertisers far above ordinary web surfers.

That leads us into my survey results, which reflect the past I’ve just described and hint at why Google may be so keen to return. Of the more than 50 people who responded to my poll, two-thirds said they were Baidu users at the time of Google’s 2010 withdrawal, while about 30% were still using Google. Nearly 70% of people said they now use Baidu as their primary search engine, mostly due to lack of better alternatives.

On the question of whether they would seriously consider Google should it re-launch in China, two-thirds of respondents said “yes”, while less than 20% said they would definitely stick with Baidu. The most often cited reason for their openness to change was Baidu’s high volume of ads, and also its tendency to promote its own sites and services over others. A number of people also pointed to Google’s superior associated mapping service, which is becoming increasingly important in an age of location-based services like shared bikes and car rides.

At the end of the day, it would appear that Baidu has plenty to worry about if Google really carries through on the reports of a plan to return. Such a move does look more and more likely given the signals coming from Google over the last few years. As to whether average users will ultimately benefit from such a homecoming, I can only add my own view that more choice can only be a good thing here in China, even if that choice is coming from a company hardly known for welcoming competition in other parts of the world.

Doug Young has lived in Greater China for two decades, including a 10-year stint at Reuters, where he led China corporate news coverage. Send your questions or comments to DougYoung@caixin.com