First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.
Slow start for Google in East Asia, but moving ahead
- — 17 September, 2010 02:34
Ten years ago this week Google extended its reach into some of the world's largest Internet markets by offering local-language search results in China, Japan and South Korea. After a decade of hard work, it is in the unfamiliar position of having to fight hard to become the dominant search engine.
Google's efforts to expand in East Asia have been hampered by local competitors, different search habits and, in the case of China, even government efforts to block its services. The uneven results, as measured in market share, have lagged behind the kind of successes Google has seen when entering other parts of the world.
"I think in most of these markets, we could be doing better," said Won-Jin Lee, director of sales for Google Korea. "I think we came to these markets a little too late and I think that's definitely not worked in our favor."
Google has yet to become a search leader in any of the three countries. It is perhaps coming closest in Japan, where it holds 37 percent of the search market, according to The Nielsen Company. This past July, Yahoo Japan said it would begin using Google technology by early next year to power its search results. That would give Google 90 percent of the Japanese search market. Microsoft has tried to block the deal, calling it anticompetitive.
In South Korea, Google lags far behind in search, providing only 7 percent of results in 2009, according to comScore. Yet its YouTube division has grown in popularity, becoming the only foreign-owned video site to rank among the top five entertainment sites in the country.
Google's most public struggle has been in China, where the government has actively blocked its search engine as well as products such as YouTube and Blogger. Google has called such censorship a trade barrier. Despite its frequent clashes with the government over free speech, Google had secured 35 percent of the search market by late last year, making it the second most popular search engine in the country. But earlier this year, after Google's servers were hacked in an attack that appeared to originate from China, Google said it would stop censoring its results in China, even if it meant having to pull out of the country.
The company worked its way through the issue, but Chinese users now have to access the Google search site in Hong Kong, and its market share has since tumbled to 24 percent.
Despite being a strong international brand, the company has been slow to understand these markets, while domestic competitors have shown they are more attuned to local user needs, analysts said.
They note that in China, while Google excelled at providing English-language search results, it was behind the curve when it came to the Chinese language. In the early days, its search engine sometimes produced results in traditional Chinese, rather than in simplified characters used on the mainland. Meanwhile, its rival Baidu, which was founded in 2000, developed popular products like a music search service and community forums that became a hit with Chinese users. Baidu produced a better search experience for Chinese users, analysts said.
"When Google started in China, it didn't really understand the conditions at the time," said Li Zhi, an analyst with Analysys International. "I don't think Google realized that China is a unique market."
In Japan and South Korea, meanwhile, where media content is often presented with bright, gaudy colors and flashing lights, Google's trademark, bare-bones search page was a turn-off for some. Local users are accustomed to content-rich pages packed with information and links, said Michael Bonfils, international managing director of the search marketing consulting firm SEM International.
"The search experience (with Google) is good, often with good results. However, it is not all that engaging," Bonfils said.
Google is well aware of the challenges and remains optimistic.
"We've had the success in a lot of English-speaking countries that can translate to other markets," said Ken Tokusei, director of product management for Google's Japan operations. "But as we spend more and more time, we start to really understand these markets and users to create much better products."
Google has invested heavily in East Asia, opening research and development centers in all three countries and hiring local engineers. Developing products tailored for local users will be key to its success, say current and former executives with the company.
Kai-Fu Lee, who was head of Google's China operations from 2005 to 2009, would not comment directly about Google, but emphasized the need for foreign companies to think locally.
"They must humbly learn about local users' needs and bring in a team that truly knows how to operate locally, and empower the team to make the decisions locally," he said via e-mail.
Still, Google's status as a multinational company has paid dividends in terms of online advertising. The company can leverage its global reach to help domestic Chinese companies advertise their products and services overseas. Google sees this as a growing market that it is primed for, and the online advertisements it sells abroad would be immune to the disruptive effects of China's online censorship.
It sees the most promise with the mobile Internet, however, which could present it with an opportunity to bolster its presence in East Asia.
In Japan, Google partnered early on -- by 2006 -- with the country's big mobile providers, ensuring that their cell phones prominently featured Google search, Tokusei said. Now, with Google's Android operating system being used in more smartphones, Tokusei says more Google products are landing in the hands of Japanese mobile users. "That's been the biggest success," he said.
In South Korea, local search provider Naver continues to be the most-visited site in the country. Korean users are simply in the habit of using Naver for desktop search, Lee said. But there too, as more people use their phones to reach the Internet, Google sees an opportunity for its mobile products.
"Would you go back to investing in something that's not growing, i.e. desktop search? Or would you focus on the market that is growing ten times faster than the incumbent market?" Lee said. "Mobile seems to be the right focus to have."