Google v/s Baidu

Localization- Globalization
(Strategic Marketing Assignment)

Submitted by-

Ashish Rathore
29018
Google China is a subsidiary of Google, Inc., the world's largest Internet search engine
company. Google China ranks as the number 2 search engine in the People's Republic of
China, after Baidu

Baidu, Inc. simply known as Baidu and incorporated on January 18, 2000, is a Chinese web
services company headquartered in the Baidu Campus in Haidian District, Beijing, People's
Republic of China.

Baidu offers many services, including a Chinese search engine for websites, audio files, and
images. Baidu offers 57 search and community services including Baidu Baike, an online
collaboratively-built encyclopedia, and a searchable keyword-based discussion forum.
Baidu was established in 2000 by co-founders, Robin Li and Eric Xu. Both of the co-
founders are Chinese nationals who have studied and worked overseas before returning to
China. Baidu.com Inc. is registered in the Cayman Islands. In February 2011, Baidu ranked
6th overall in Alexa's internet rankings. During Q4 of 2010 it is estimated that there were
64.02 billion search queries in China of which Baidu had a market share of 83.6%. In
December 2007, Baidu became the first Chinese company to be included in the NASDAQ-
100 index.

According to Analysis-International a Beijing based firm declared on 15 February, 2011

that, the Chinese dragon is eating rival Google’s lunch, at least in China. The Chinese search
engine giant beat Google and gained the #1 rank in China. At present, Baidu’s market share
in China is 75.5% which increased from 73% three months ago. According to Analysis-
International a Beijing based firm declared in a statement.

The 21st century is an era of economic globalization, with foreign enterprises swarming
into China to "localize", while Chinese enterprises are actively preparing to enter
international markets. Traditionally, older, more established industries, multinational
companies and domestic enterprises have needed to consider various problems
surrounding available funds, costs, equipment, production lines, distribution channels and
patents in their localization or globalization drives. However, the Internet industry does
not seem to have those complications. This is because the Internet itself links the whole
world; technology, services and talents are the only considerations that enterprises need to
take.

However, everything is not that simple either. Google: ambiguous "localization"

"Localization" has almost become a tightening ring over all foreign Internet enterprises
that have entered China. Following Yahoo!, Google, eBay and Amazon have also taken
footholds in China. However, what we have seen are not fast-marching international giants
but a succession of foolhardy youngsters. When Yahoo! China vowed itself to Alibaba, eBay
was acquired by TOM, and Joyo almost disappeared from sight, it left only Google to sustain
this solo play.

Despite its large number of high quality and loyal users, its carefully devised card of "Gu Ge
(Google) -- the only name for other languages" and its continuous active innovation to
attract attention from Chinese users, sluggish performances and much blamed
"localization" have nevertheless forced Google, the Internet giant which can look down
upon the world, to bow its head in the Chinese market.

In fact, for both Google and those people who often use "localization" to castigate it,
"localization" seems to be a catchphrase. As for what is precisely the meaning of
"localization", how many can tell clearly?

Baidu: unclear "globalization"

In contrast to foreign enterprises' enthusiasm, Chinese Internet enterprises are still

cautious about globalization. Sina, Sohu, NetEase and Shanda are all listed on NASDAQ in
order to raise overseas capital. This is not true globalization. TOM's acquisition of eBay and
Alibaba's acquisition of Yahoo! China only remain at the level of integrating local resources
in China. Shanda has acquired Actoz to solve the copyright problem, while Kingsoft Online
Games has ventured to Europe, America and Southeast Asia to export its products. The
enterprises themselves have not gone out of China. At present, Baidu seems to be the only
one to challenge the overseas market on a large scale.
Claiming "Baidu understands the Chinese better," Baidu has chosen Japan, a challenging
country to make breakthroughs in the overseas market. The Company is now paying a price
for this. After the "domain name episode", its website in Japan is recently inaccessible.
Statistics show that Baidu (Japan)'s main traffic comes from China. Just as they are not
optimistic about foreign giants' "localization", people equally have doubts about Baidu's
"globalization".

"Localization" vs. "Globalization" -- the same nature

"Localization" and "globalization" talk about the same thing. Some people stand out of the
door, while some stand inside. Those who enter it talk about "localization", while those
who go out speak of "globalization".

In all reason, Google has the search engine control in the United States and across the
world. It should have a say in both "localization" and "globalization". By its position in
China's search market, Baidu also has a profound understanding of "localization". However,
both of them have tumbled over the "localization" threshold.

In fact, both "localization" and "globalization" mean that enterprises leave their former
fertile soil to tillage a piece of new land. Before departure, enterprises must have seen that
golden beans can be harvested from the land. However, though all have taken golden beans
to plough the land, some have got soybeans. The problem can only come from two aspects.
One is that they have used the wrong seed; while the other is they have adopted the wrong
method. When enterprises select their strategies, they will face two directions: to change
themselves to adapt to the market or stick to their style and guide the market. Whatever
the choice, "localization" is neither a concept nor experience that past success can only be
used as a reference.

"Localization" is a thinking model. "Localization" does not mean to set up a local company,
speak a local language or provide some services that are already available in the local
market. Just like Google has labored to find a Chinese input method only to find the trouble
it has caused.
In fact, "localization" really is a thinking model. One needs to learn in order to consider
problems that can arise using the local society and to understand the local market and even
get integrated into the local culture. This is why many multinational companies choose
Chinese people to serve as their executives for their China branches. When your
management team cannot fully understand the market, failure, rather than opportunities is
the only thing that waves to you.

However, a team led by a Chinese person has only showed a posture of "localization".
Fundamentally, it should have a determination of "localization". To learn about the thinking
of "localization", some indigenous methods may have to be grasped. For example, to
expand in China's Small Medium sized Business (SMB) market, is Google willing to throw
off its airs as a foreign company to change into the Chinese thinking and develop the
market? Is it willing to concede to work alongside SMBs? Can it truly give up playing up
those flowery technical advantages and let SMBs see some real benefits? For Baidu who
sets foot on an alien land, profound cultural differences and linguistic habits lay ahead
though there are some similarities between Chinese and Japanese users. It is right for CEO
Li Yanhong to say that the Japanese should be employed to manage Baidu (Japan).
However, to truly get a place in the market, one has to see whether users accept them. It is
not known whether Li has thoughts about that how Japanese natives with a strong national
pride will listen to Baidu

Both Google and Baidu need to put a mirror in the door between "localization" and
"globalization" to see whether they look more like a foreigner or a local person. Make sure
of it and then march forward!

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