As I prepare my bags for another trip to Asia, I’m looking for a simple way (one that I can grasp) to try and figure out what exactly what is going on with the confusing search scene in Asia.
Here are the questions I’ll try to answer:
- Is Google still operating in China?
- Who rules Japan?
- What about Korea?
- Who is SoftBank?
- Why do we still talk about Overture in Asia?
Is Google still in China?
The answer to this is “yes” and “no.” Having originally re-directed its China search page to its Hong Kong-based home page, following discussions with the Chinese government Google changed that to a link you had to click from its mainland China homepage to go to the Hong Kong page to conduct a search. Google achieved this by creating an image of its Hong Kong site which looks like a search box. However, when you try to insert your cursor into the search box you actually click the link and move over to Google.com.hk. Check this out at Google.cn.
So, yes, people in China can still use Google to conduct searches but they are an odd extra click away. Analysys International recently reported that Google still ranked in second place in China with a 24.2% share—a drop from its 30.9% share earlier in the year which seems to suggest that Google has at least survived—but it has taken a significant hit in share. If those figures continue decreasing, we will know that Google has been damaged below the waterline. But they may equally recover and surprise everyone!
Meanwhile, China Mobile, which is actually the world’s biggest cellphone carrier and Xinhua, China’s official state news agency, have decided to jointly launch a new search engine of their own, though it’s not entirely clear if this will be for mobiles only or for all users. At the same time, Baidu CEO Robin Li suggested that Baidu might be interested in international expansion.
Who rules Japan?
I cannot ever remember seeing so much confusion over who is doing what and who is on top in Japan. According to official statements, Yahoo’s Japanese organic search is to be powered by Google—and not Bing—though the results will be tweaked by Yahoo as they always were when Google powered Yahoo globally. Yahoo Japan will also adopt Google’s pay-per-click management platform and not Bing’s.
But wait, the dates for when this is going to happen aren’t yet clear and it is likely that paid search results will need to go through a relatively lengthy migration process with the organic results switch leading the way. Strictly speaking, at the moment, Yahoo is still number one in Japan according to the various studies which examine search engine shares although things were getting a little closer—and ads are still running Yahoo’s Overture-based system.
So, how come Yahoo can go in a completely different direction in Japan when it has a “global” agreement with Microsoft? Simple. The crown jewels (as we British call things of prime importance) of Yahoo in Japan and Korea are all part-owned by SoftBank. More of that in a moment.
What about Korea?
At the end of August, NHN Corp., which owns the leading Korean search engine “Naver,” announced that it will use its own “click choice” service instead of relying on the old Yahoo-Overture platform—a further blow for Yahoo. It also means that Naver becomes a leading search engine and paid search option in the east. Naver has just over 60% market share in South Korea dwarfing all others in the market—including Google, which has a mere 7% share.
It’s a fascinating development that in a significant market a local search engine should split away from the major paid search advertising providers and run its own solution. I don’t remember this happening anywhere else since the very early days of Russia’s Yandex, China’s Baidu and the Czech republic’s Seznam, with the possible exception of those search engines which “back-fill” their own advertising systems using Google or Yahoo, such as Eniro in Sweden.
Who is SoftBank?
SoftBank Corp. is a really interesting and complex Japanese telecommunications business. It has a long history, having been formed in 1981 and at one time owning Ziff Davis the publishing company and Vodafone’s Japanese operation amongst many other projects, as well as launching the iPhone in Japan. SoftBank’s relationship with Yahoo goes back to 1996 when the two partners formed the Yahoo Japan Corporation. In addition, to owning 41% of Yahoo Japan, SoftBank is also a partner in Alibaba.com in China. It is SoftBank’s size and importance which gives Yahoo Japan Corporation a high measure of independence from its American “parent.”
This means that Yahoo Japan is a separate entity that can do what it wishes and has its own shareholders to look out for.
Are we done?
We didn’t answer the Overture question—but that’s an old Yahoo advertising system which has not yet disappeared from the East. It’s definitely on the way out now though!
All in all, what we’re seeing is a domino effect as one piece triggers the fall of another. Yahoo planning to remove support for its pay-per-click system globally has undermined the whole ecosystem in the east and Yahoo Japan has been forced to make changes, triggering an opening for NHN in Korea to take the opportunity to make its own decisions too. But the story isn’t over. Google reducing its commitment to China, Baidu looking out internationally and the launch of completely new search engines and services means that there is more turmoil to come. Great news for us far east search engine watchers—and I’ll be writing more once I’ve actually been on the ground in Asia and can see first-hand what is going on.
Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.