The Chinese Internet has surpassed the US in terms of overall users. According to BDA China (reported in USAToday), there are more than 220 million Chinese Internet users (17 percent of the population) compared with 216 in the US (71 percent). This is simply a function of the huge scale of the Chinese market, with much more growth to come.
In the Q1 earnings release, Google said, “Revenues from outside of the United States totaled $2.65 billion, representing 51% of total revenues in the first quarter of 2008, compared to 47% in the first quarter of 2007 and 48% in the fourth quarter of 2007.”
With signs of maturation in the US paid search market, international growth is critical to not only Google but its search competitors as well. Google has said it wants to be the search leader in China in five years, which will be a challenge given how far the company trails Baidu in market share.
Because of its sheer size, and in terms of business considerations, China is a crucial market for US search companies. However, the censorship, autocratic control, and human rights abuses of the Chinese government continue to show the conflict between the amoral growth imperative driving the market and other values (e.g., “Don’t Be Evil“).