The New York Times reports that, despite high hopes for its success, Google in China had the decks stacked against it from the beginning, as have all foreign IT companies who set up operations there:
While each failure has been different, analysts say the cases may help explain why Google is frustrated — not just by government censors but by its inability to catch its big Chinese rival, Baidu.
Google, an Internet Goliath with $22 billion in revenue and some of the smartest people on the planet, is getting clobbered in China, holding 33 percent of the search engine market to Baidu’s 63 percent. Google has gained significant market share since it formally entered China five years ago, but almost all of that has come from smaller rivals. Baidu also gained market share in that time.
No one expected it to be this way. America’s bleeding-edge technology giants came here armed with cash, intellectual property and an ability to manage complex networks and introverted workers. They each bought or invested in local Internet companies and hired Chinese executives, and they worked to show sensitivity to the byzantine social customs of the world’s most populous country.
But all of them were outsmarted in different ways.
See also “Google Flap Highlights China Risks” from Business Week.
