Currently Google faces major issues regarding its operation in China. Google has been faced with the decision to comply with Chinese government regulation and censor its search engine results or take on the human rights approach of freedom of speech and eliminate censorship of searched terms. This paper will examine the case study, Google in China, and answer the following questions: What advantages and disadvantages does Google have in the Chinese market in comparison with Baidu? What is the business model of each company?
And what factors should Google have considered in reaching its decision on the new approach in China? What advantages and disadvantages does Google have in the Chinese market in comparison with Baidu? Advantages that Google has over Baidu in the Chinese market include the public having access to un-censored search terms, Google’s AdWords and AdSense technology, and its partnership with China Mobile. Google also offers attractive applications such as “Picasa Web Album, Google Docs, Google Talk, Google Calendar and Google Checkout” (Yin & Yulin, 2010, p. ). Some of Google’s services include “Google Earth, Google Hot List, Q&A and a free legal music download service” (Yin & Yulin, 2010, p. 3). In comparison with Baidu, Google does have some disadvantages which include its suspended “ability to search through foreign websites and its associative-word search function”, its criticism from Chinese Regulators and bad publicity from Chinese writers accusing the company of copyright infringement (Yin & Yulin, 2010, p. 3).
Baidu has several advantages over Google that are mostly associated with it being a Chinese based company, for one the search engine has “competence in pinpointing queries in the Chinese language” (Yin & Yulin, 2010, p. 4). The search engine also uses techniques to search for keywords; these techniques include link analysis, information extraction, web crawling, and Chinese-language processing. Overall the Baidu experience is based on reliability in its searches and its simplicity. What is the business model of each company? The appeal that has brought Google such success is its simplicity.
The search engine is very user friendly; it is this simplicity that has made it the number one search engine in the world (Google vs. Baidu, n. d. , “Abstract”, para. 1). This has made the company very popular among other companies wishing to pursue online advertising. By using its AdWords and AdSense technologies the company has been able to capture a large share of companies wishing to advertise online. The opportunity to buy advertising through Google is sought after because Google has the ability to target very specific markets of people.
Google’s well-known success has made its company’s shares very favourable. It is these business and revenue models that have helped Google become the number one search engine in the world. Baidu’s business model is based on tailoring its search engine to meet the needs and preferences of the people living in China. The company makes its revenue from “[its] online marketing services [which include] a pay-for-performance (P4P) platform and tailored solutions”, it was also the first company in China to use this method, and therefore attractive in the eyes of its customers (Yin & Yulin, 2010, p. ). Baidu captured the Chinese market “because it was cost-effective and measurable” (Yin & Yulin, 2010, p. 4). What factors should Google have considered in reaching its decision on the new approach in China? There are many factors that Google should have considered when reaching its decision on the new approach in China, such as whether it was worth the increased revenue to operate in a country where there is a poor relationship with that country’s government.
Google’s media/public relations department should also have considered all the negative public relations it would receive for not respecting the Chinese government’s regulations. Conclusion Google’s dilemma of whether to operate in China under government regulation or to eliminate censorship of Google. cn is a complex one which involves several controversial factors. Respecting authorities in China and human rights and the freedom of speech debate play a fundamental role in Google’s issue.
Solving this issue involves weighing many aspects such as profit maximization, respecting Chinese authority, and/or making a decision that agrees most with the company’s values and beliefs. In this case there may not necessarily be a right solution to this issue but a solution that is better than the others.
References Majela, Y. & Fand, Y. (2010, June 6). Google in China. Retrieved from Richard Ivey School of Business Foundation. Shanual Muthu Kumar. (n. d. ). Google vs Baidu. Retrieved September 28, 2010, from http://www. ibscdc. org/Case_Studies/Strategy/Business%20Models/BSM0042. htm