Bottom line: Baidu’s first-ever loss since going public reflects a long-anticipated decline for its core search business, which could mark the start of a longer-term decline due to lack of a strong new business lines.
Baidu in search of search replacement
It seems that profits are increasingly hard to come by these days on China’s Internet. That’s the major takeaway coming in the latest results from search giant Baidu(Nasdaq: BIDU), which has just posted its first loss since becoming a publicly listed company 14 years ago. Perhaps most worrisome, the biggest issue appears to lie in Baidu’s core search business, always a cash cow in the past, whose operating profits tumbled in the first three months of the year.
The surprise loss is one of the first-ever that I can recall for China’s three largest Internet companies or the BAT, namely Baidu, Alibaba(NYSE: BABA) and Tencent (HKEx: 700). That’s led many to wonder whether Baidu’s glory days are fast fading into the rear-view mirror, or whether perhaps this company has another trick pony beyond its search business that has sustained it for years. Read Full Post…
Bottom line: Amazon’s withdrawal from selling domestic goods to local buyers in China was inevitable due to its lack of a standout service and cut-throat competition from Alibaba and the money-losing JD.com.
Amazon shutters core China e-commerce selling domestic goods to domestic buyers
The e-commerce headlines have been buzzing these last few days with word that global giant Amazon (Nasdaq: AMZN) is abandoning China, representing the latest setback for a western Internet company in the large market. Amazon has come out with some statements clarifying the matter, in a move somewhat akin to what happened when Internet peer Google(Nasdaq: GOOG) made a similar withdrawal nearly a decade ago.
As Google did then and Amazon is doing now, both companies are being quick to point out that they aren’t completely withdrawing from China, but rather are just exiting what’s arguably their most important business. In Google’s case it shuttered its core China search engine. Now with Amazon, the company says it’s shuttering the part of its business that sells domestically-sourced Chinese products to customers in China. (English article) Read Full Post…
Bottom line: A major new campaign calling on Google to abandon its plan to return to China’s search market will add pressure on the company to reconsider its decision, but is unlikely to succeed unless the pressure grows significantly stronger.
Amnesty launches petition to protest Google’s China return
If Google (Nasdaq: GOOG) CEO Sundar Pichai thought he could quietly launch a new filtered China search engine without any major backlash, he’s quickly finding out otherwise. The search giant’s controversial plan to return to the world’s biggest search market is facing its stiffest resistance to date, in a frontal assault coordinated by human rights group Amnesty International and Google’s own employees.
The message from both groups is the same: Don’t do it. In Amnesty’s case, the group has launched an online petition (announcement) calling on Google not to go through with the plan, code named Dragonfly, that was first uncovered back in August. (previous post) At the same time, a group of more than 300 Google employees has signed a petition urging the company to reconsider its China plans on the blogging site Medium. (online petition) Read Full Post…
Bottom line: Google’s decision to finally talk openly about its plan to return to China looks smart though slightly late, by explaining the desperate need for alternatives in the massive though tightly controlled search market.
Google breaks silence on plan to return to China search
After staying mum on the subject for quite some time, Google(Nasdaq: GOOG) is finally speaking out on its controversial decision to return to the China search market. Its CEO Sundar Pichai broke the company’s silence on the matter at an event this week sponsored by Wired magazine, going on the offensive to try and defend his company’s decision.
It does seem like the company should have taken this kind of more aggressive approach sooner, rather than waiting more than two months from when the news first broke. (previous post). From my perspective as someone living in China, this country is really in dire need of an alternative to current search leader Baidu(Nasdaq: BIDU), and the argument has nothing to do with propaganda or censorship. Read Full Post…
Bottom line: An internal petition calling on Google to be more transparent about its plans to return to China represents the first major backlash to the move, but is unlikely to dissuade the company from going ahead.
Google employees question China return
When the news first broke a couple of weeks ago that Google(Nasdaq: GOOG) was planning a return to China’s search market, many predicted that western sources would be quick to criticize the plan, even though few voices have actually spoken out so far. Fast forward a couple of weeks, when we are hearing the first sounds of what’s likely to become a sea of protests if and when the company actually makes its China search homecoming.
Perhaps not too surprisingly, the first salvo in the storm of protest that could soon emerge is coming from within Google itself, with word that employees are circulating a petition raising questions about the reported move. (English article) This kind of internal debate could be especially troubling, since the last thing that Google wants is an uprising within its own ranks at such a delicate time. Read Full Post…
Bottom line: A new report on Google’s plan to launch a new China search engine within the next year looks credible, and underscores the company’s decision to put the market’s big potential ahead of the negative backlash such a move will bring.
Google prepares to enter eye of China storm
A story in a publication called the Intercept is making big waves in China, saying search giant Google(Nasdaq: GOOG) is preparing a major about-face on its decision to leave the country’s large but highly controlled search market. (English article) While I’ve never heard of this particular publication, the level of detail it contains appears to show it’s credible, which is probably why most major western media are running reports based on the story.
In short, the story says Google has quietly been developing a China-specific version of its search engine that will adhere to Beijing’s strict rules for self-censorship, and has code-named the project Dragonfly. Google previously operated such a search engine in China, but famously pulled out of the market in 2010 after deciding it didn’t want to adhere to those self-policing policies that require removal of all links to sensitive subjects. Read Full Post…
Bottom line: Facebook and Google’s latest micro-moves into China reflect their longer term efforts to get permission to launch major services in the market, though it’s unclear if they will get such a green-light anytime soon.
Facebook, Google take new baby steps in China
You have to give China-challenged Internet giants Facebook (Nasdaq: FB) and Google(Nasdaq: GOOG) an “e” for effort. Both companies have popped into the China headlines over the last two weeks for micro-moves into the world’s largest Internet market, including the latest news that Facebook plans to set up a company in Hangzhou that will become an “innovation hub”.
The Facebook news comes just about a week after Google confirmed that it has launched a new artificial intelligence (AI) game in China on a platform operated by local Internet giant Tencent(HKEx: 700). Both of these moves are miniscule in the big scheme of things, especially for companies of Google’s and Facebook’s size. But they do reflect the kind of baby steps, some might also say groveling, that such corporate giants will need to take to get a hold in the world’s largest Internet market where they are now mostly denied permission to operate. Read Full Post…
Bottom line: Baidu’s reorganization of its mapping unit reflects growing competition in the space, and could ultimately end in a shuttering of the service if its usage continues to decline.
Baidu mapping service charts new direction
The wheels of restlessness at online search leader Baidu(Nasdaq: BIDU) are grinding into motion once more, with word that the company has made a major shift in its popular mapping division. Company watchers will know the restlessness to which I refer is a direct reference to Baidu’s founder Robin Li, who is famous for getting into new businesses, only to tire of and ultimately jettison them after just a few years.
In this case it’s probably far too early to say if that’s the case for Baidu’s mapping unit, which has been one of its most popular products for quite some time, thanks in no small part to its dominance in online search. The problem is that Baidu has failed to keep pace with more nimble competition, most notably from the Alibaba-owned (NYSE: BABA) AutoNavi. What’s more, an equally large potential rival is looming in the form of global giant Google(Nasdaq: GOOG), which has recently begun updating its previously dormant China mapping service. Read Full Post…
Bottom line: Google has quietly resumed updates of its China mapping service in a bid to tap the booming local market for location-based services.
Google resumes China mapping updates
Are they or aren’t they? That’s the question going through everyone’s minds these days about Google’s(Nasdaq: GOOG) stealth return to China, following reports that the company has quietly re-launched its previously dormant mapping service in the market. In this case there are quite a few conflicting signals, including the one coming from Google itself, which says nothing has changed with its mapping service.
I was a bit surprised at Google’s definitive statement, since I can say with certainty that the company has indeed resumed updating its popular mapping service following a dormant period of at least a few years after shuttering its China-based search service in 2010. Last year there was similar word that Google’s map site had resumed service in China, and I went and checked the URL at the time. Read Full Post…
Bottom line: Google’s launch of a China AI lab marks the latest step in its campaign to curry favor with Beijing, which could give it a 50-50 chance of being allowed to sell its Pixel phones and open a China Google Play store in 2018.
Google’s China return like watching grass grow
Chronicling Google’s (Nasdaq: GOOG) slow march back to China has been a bit like watching grass grow these days. It’s been a painfully slow process, including the latest announcement that the company will open an artificial intelligence (AI) lab here in Beijing. Put more cynically, one might call this the world’s longest brown-nosing exercise in the brief history of the Internet, due to unique conditions that prompt many to say that Beijing is in some ways creating its own made-in-China 1.1 version of this medium of the 21st century.
That internet version 1.1 includes features like China’s notorious firewall that filters out sites that Beijing doesn’t like for the vast majority of the country’s more than 700 million web surfers. A corollary of that is that anyone who operates an officially-registered website inside China tacitly agrees to abide by the nation’s vague laws that require all operators to self-police their sites for sensitive content. Read Full Post…
Bottom line: Twitter’s conservative approach to China reflects a broader indecision at the company that is limiting its growth potential.
Twitter shackled by indecision in China
While social networking giant Facebook (Nasdaq: FB) actively flirts with China in a bid to enter the world’s largest Internet market, the smaller, struggling Twitter (NYSE: TWTR) seems unable to make up its mind. That seems to be the key takeaway from a new interview on the prickly subject of China between Maya Hari, Twitter’s Asia Pacific chief, and Caixin, a well-respected Chinese financial media that also happens to be my current employer.
This particular message seems to be a recurrent theme with Twitter, which, like Facebook, doesn’t like China’s strict self-censorship policies but also finds it hard to ignore such a big market. In Facebook’s case, the company has made it quite clear it’s willing to tolerate China’s self-censorship policies for a chance to build a presence in the market, most likely through a future joint venture with a local partner. Read Full Post…
