You have to love the communists. In China, to be a news distributor, a company must be approved by the country’s Ministry of Information and Industry. Google (GOOG) got this approval recently, and that will give it the opportunity to mount a bigger challenge against Chinese search leader Baidu (BIDU).
One analyst quoted by Reuters said: "The license to provide content to audiences is critical to attract big advertisers, and also helps them try to have more content."
Although reliable figures are hard to come by, Baidu’s share of the search market in China appears to be about 60% to 25% for Google. Yahoo! (YHOO) is a distant third.
The Chinese obviously like their search home grown. It may be that due to the complexities of the language Baidu will be able to maintain its lead despite the money that Google can pour into a market that now has the second largest number of internet users after the US.
If there is some magic to being a news source in China, perhaps Google will get a break.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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