Saturday 7 November 2009

US internet giants still struggling in China


I’m back in Asia, Singapore again, taking a breath from recession-plagued Spain where “la crisis” is still dominating conversations and now comfortably beating discussion topics like the wheater and football. With China around the corner, some interesting media news were grabbing my attention in the last week.
First of all there was the lackluster launch of Apple’s iPhone by China Unicom. The company reported having sold only 5,000 devices during the first days in a land that has 720 million mobile phone users. Probably a 6,999 yuan (US$1,025) price tag is a tad too high for Chinese middle-class households? Another possible reason might be that the real iPhone fans already have theirs, either through Hong Kong or from overseas.
Google has also its issues with the Chinese market. Today we hear that its 7 month old Chinese Music Search is still behind target. It’s hardly possible to make money with a legal download service in a country where 99 percent of music files are pirated, states the PaidContent article. Google’s biggest competitor Baidu, still with a two third share in the Chinese search market, owes most of its popularity mainly to this illegal traffic. Yes, it’s difficult to sell quality content in Asia, just ask our Dow Jones Sales team here.
Additionally for Google, some of its search functions had been blocked earlier this year by the Chinese authorities, as it was supposedly giving access to pornographic content. The global leader in search remains still with a marginal share in the largest market, with 338 million active Internet users, according to numbers from the Chinese government.
During the turmoil in the Xinjiang province this summer, Google’s video database Youtube has also been taken partially down, along with Twitter and Facebook. It’s expected that those services will be accessible again very soon, now that the celebrations for China’s 60th birthday are finally over.
But the shocking news for Facebook has been a drop of its user base from one million in July to 14,000 at the beginning of October, as Inside Facebook reports. “There are a lot of extremely popular domestic sites with social networking features, after all, such as Tencent”. Now we understand a bit better why those local sites are so popular in Asia.