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Posted by: Bruce Einhorn on October 29, 2007
If you’re in China and you want to watch something on YouTube, good luck. Google’s video service has been on the blink in China, possibly another victim of Beijing’s Internet police.
In mid-October, Chinese Internet users found they couldn’t get access to Google and some other U.S. websites. When this happens in other countries, you probably blame bad luck or some sort of telecom connection snafu. In China, where censorship of the Net is an everyday thing, when you can’t get to Google, you know that it’s probably because somebody has made a policy decision: Today, no one in China Googles anything.
The giveaway in this case was that people who tried to get to Google found themselves diverted instead to Baidu, the company’s Beijing-based rival, which has a track record of being far more loyal to the Chinese government’s Internet control policies than the Americans.
Last week, I blogged about this and mentioned that Google’s Hong Kong-based spokesman John Pinette reported that Google was indeed up and running again in China after a short blackout that lasted less than a day. This round of Google’s Chinese censorship woes are not over, though. The search engine came back, but people in China who want to use YouTube still reported having trouble.
A week later, the problem hadn’t gone away. Here’s what Google spokesman Pinette told me via email late in the day on Friday: “We understand there are reports of some users being unable to access YouTube within the People’s Republic of China. We are looking into the matter, and hope that the issue will be resolved soon.”
Not sure whether there was any progress over the weekend. Will let you know what I hear. But this certainly is good news for the many YouTube wannabes that are based inside China. Companies like Shanghai-based Tudou (tudou is the Chinese word for potato) have been attracting millions of dollars in venture capital money from investors in the U.S. as well as inside China who figure that, just as Baidu has been kicking Google around in the Chinese market, a company with strong local roots can command the No. 1 slot in the video business and relegate YouTube to also-ran status.
Certainly Baidu has not suffered for being seen as too close to China’s regulators. According to the latest market-share numbers from Beijing-based Analysys International, Baidu has strengthened its No. 1 position in the Chinese search market, with 60.5% of the market compared to Google’s 23.7%. And on Friday, the company reported that Q3 earnings were up 113% to $24.2 million on revenue of $66.3 million. (See the AP story on BusinessWeek for more.) Baidu’s stock price is up 213% so far this year.
Numbers like that are bound to instill confidence in investors looking for the next big Web 2.0 play in China. And with Chinese censors playing games to prevent YouTube access in China, the chances that a home-grown alternative can, Baidu-like, dominate the market at bet are looking better and better.
BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.