Google Gets License to Do Business in China
Web services leader Google Inc. has won a license to operate in China and has bought a Web address as it battles Yahoo Inc. in the world’s second-largest Internet market, according to several sources within or close to the company.
The Web giant, which makes its money from searches, advertising and other services, is hiring staff with the aim of opening an office in the country this year, the sources said Wednesday.
One person familiar with the matter said that the office would most likely be in Shanghai and that Google was forming a team to target corporate customers for advertising sales.
A Google spokeswoman had no comment on those matters.
The news came on the same day that Microsoft Corp. announced two ventures to expand its presence in China
China had 94 million Internet users at the end of last year, more than any other country except the U.S. The figure is expected to grow to 134 million by the end of this year, according to official data.
But major players must cope with rampant censorship in China. Most firms voluntarily block searches on sensitive topics, including the Falun Gong spiritual movement and the 1989 crackdown on pro-democracy protesters in Tiananmen Square.
Google itself fell victim to a periodic blocking of some websites in 2002, when people who tried to access Google’s Chinese language site were routed to an array of other similar sites.
China’s online search market totaled about 1.25 billion yuan ($150 million) last year, up 81% from 2003, according to Shanghai iResearch. But competition is intensifying.
Google last year purchased a small stake in China’s leading search engine, Baidu.com, which is moving to have its stocks listed on an overseas exchange.
Baidu led the market with a 36.3% share, followed by Yahoo with 22.7% and Google with 21.2%.
Google has not commented on the strategy behind the purchase.
But it may be hoping an expansion in China can help it sustain its rapid growth pace, reflected by a near-sixfold rise in first-quarter profit that was announced last month.
Its stock has leapt nearly 170% since an initial public offering in August. Shares of Google were up $3.49 at $231.29 in Nasdaq trading Wednesday.
Other rivals include Nasdaq-listed Sohu.com Inc., whose name means “search fox” in Chinese. Microsoft’s MSN network also operates a search engine at its China site, china.msn.com.
On Wednesday, Microsoft announced two ventures designed to expand its MSN presence in China to offer “the full gamut of [what] a true Internet portal should be,” the company said.
Both ventures involve relatively unknown Chinese players, with one centered on Microsoft’s traditional MSN Web-based services and the other on services for mobile phones.
