Departing China chief points to more woes at Google

PUBLISHED : Tuesday, 16 July, 2013, 12:00am
UPDATED : Tuesday, 16 July, 2013, 5:34am

Google's China chief has resigned, creating uncertainty about the online search giant's future on the mainland.

Google said yesterday that John Liu Yun, one of its vice-presidents and its greater China president, had decided to leave the firm. It said he would be replaced by Scott Beaumont, the director of its partnerships business in Europe, next month.

Liu joined Google in 2008 and succeeded Lee Kai-fu, who resigned in September 2009, as its China chief. Three months later, Google accused the central government of hacking its servers. It moved its Chinese search service to Hong Kong in March 2010.

Google's share of the internet search market on the mainland has dropped from more than 30 per cent then to about 2 per cent last month, according to Chinese data firm CNZZ.

Mark Natkin, the managing director of Marbridge Consulting, a China technology research firm, said Google's decision to move its servers out of the mainland had seen its prospects there dim considerably. Natkin also said Google's Android operating system had proven difficult to monetise, despite accounting for 69 per cent of all smartphone sales on the mainland in the three months to April.

Devin Dai Zhikang, the founder of popular internet forum Discuz!, said Liu would have had a hard time in such a job.

Foreign companies found it difficult to cope with the special political and business environment on the mainland, especially cyberspace, Dai said.

The government's regulation of the internet imposed rules different from overseas, and the rise of domestic search engines, such as market leader Baidu, also added to foreign search engines' woes.

"Liu must have been under a lot of pressure," Dai said. "Google's situation in China is worsening. Competition here requires extremely quick responses.

"For instance, you must roll out new search services, such as for train tickets, in a short time, before the Spring Festival, to get an edge over your competitors. While foreign companies are good at technology, they are not fast responders in terms of new services.

"I don't think Liu's successor can bring any magic to reverse the deterioration."

He Jianying, a vice-president at the China Centre for Information Industry Development, said Beijing would not change its policy towards Google, especially after the revelations of Edward Snowden. Foreign companies, including Google, were allegedly involved in US government spy projects and that gave Beijing a very good reason to tighten its control of such companies on the mainland, with Google a major target, He said.


Additional reporting by Reuters