Internet search giant Google is likely to establish a mainland presence after completing its US$2.71 billion initial public offering, in an effort to convert its popularity in China into advertising revenue.
The firm commands 30 per cent of all mainland search inquiries, lagging the 48 per cent processed by Baidu.com, according to data from Shanghai-based iResearch.
It derived just US$1.2 million in revenue from the mainland last year, primarily by providing search engine technology to portal Sina.com. Advertising - which accounted for 95 per cent of the company's US$961.87 million in revenue last year - contributed nothing from the mainland.
'You need to monetise the traffic but how can you do it?' DBS Vickers analyst Wallace Cheung asked.
An investment banker who met executives of the company said Google had a 'historical bias' towards organic growth and would probably set up its own mainland offices, to gain local experience, before buying a Chinese competitor.
'I think post-IPO, they'll probably grow out here more aggressively,' said the banker, who asked not to be identified. 'I don't think they're going to acquire immediately to get into the market.'
