10e20 Blog

Google and Yahoo’s overseas competition is strengthening. Baidu.com, China’s largest search engine, plans on offering Japanese search services beginning in 2007 and will compete with Yahoo and Google.

According to Robin Li, Baidu’s Chief Executive, the company has been studying the Japanese market for approximately six months. In an article with the Wall Street Journal, Li says:

“We carefully studied the Japanese market. It’s primarily dominated by two players we are very familiar with. We think we can do better.”

Baidu is already faring well in China. Alexa rates it as the most visited site in China, while Yahoo is #6 and Google’s English site is #8. (Google’s Chinese site is ranked lower.)

And so Google, which apparently had plans to use the Chinese search market to its benefit, fell behind. Sixty-two percent of Chinese users prefer Baidu, according to a study released by the China Internet Network Information Center, which is 15 points up from 2005. On the other hand, Google fell 25 points.

Baidu undoubtedly has an edge over Google and Yahoo in the Asia-Pacific market. Even though the Japanese written language is based on the same character set as the Chinese language, Baidu has marketed its engine on a nationalistic premise. According to David Greising, who covered the battle for the Chicago Tribune, a recent advertising campaign emphasized that Google is a foreigner with “suspicious ambitions.”

Baidu’s none-too-subtle use of nationalism was on display in a recent online advertising campaign. It didn’t slam Google by name, but it featured a group of villagers accosting a foreign couple. “You don’t understand us, you don’t understand us,” one village elder scolded the outsiders. In a country with an ingrained distrust of outsiders, the message resonated.

Despite Google’s claims that it is not clear who will win the Asia-Pacific market yet, and especially not Japan, the preference of users points to Baidu. It will be interesting to see how Baidu’s entrance into the Japanese market will affect user search choice and if Google and Yahoo will prevail.