After the search wars, Google is still relevant in China

By Emerging Money>,

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The search engine wars in China seem to be over, but Google is finding ways to remain a relevant player in the world's fastest-growing Internet market. The latest market share numbers reveal that Google ( GOOG , quote ) now runs just 18.9% of all Chinese search requests, compared to a peak of 35.6% in late 2009. Since then, disputes with Beijing over censorship and hacking have made it impossible for GOOG to recapture any growth momentum on the mainland. Instead, Baidu ( BIDU , quote ) has consolidated its position as the leading search portal in China, growing its share to 75.9% -- up a full 17.9 percentage points in the last two years. Most of that growth came at the expense of Google, with a slice representing the elimination of second-tier start-ups from what now looks like a mature duopoly That said, upstart search engine Sogou, run by Sohu ( SOHU , quote ) is holding on with a 2.4% share and was even growing at a rate of 0.9 of a percentage point in the recent quarter. Will SOHU be able to carve more out of Chinese search? It is unlikely, but anything can happen. Meanwhile, GOOG and BIDU are working together on the Android phones that have won the hearts of Chinese consumers. Google may be locked out of search, but it still owns the Android operating system, which runs on roughly half of all new smartphones being sold in China at the moment. That translates into a run rate of at least 5 million units a quarter, compared with perhaps 500,000 iPhones from Apple ( AAPL , quote ) and 500,000 Blackberry phones from RIMM ( quote ) ). The downside is that 80% of these Android phones have set as their default search engine, and the lack of an official Android Store in China prevents Google from taking a piece of app sales. To see the rewards for winning the Chinese search wars, take a look at how well GOOG and BIDU have fared in the last year:

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks
Referenced Stocks: AAPL , BIDU , GOOG , RIMM , SOHU

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