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The purpose of this blog is for my personal use. It serves as my personal diary as I investigate Chinese internet/gaming companies for investment purpose. If you have any comments or disagreement, please give me feedbacks.

Wednesday, September 19, 2007

China’s Internet Market Survey

On 9/17/2007 – China IntelliConsulting Corp (CIC) published the survey results based on users in three of China’s most important cities, Beijing, Shanghai, and Guangzong. The result speaks well for Sina and of course, Sina is all over this news.

The link is as follows:

http://tech.sina.com.cn/i/2007-09-17/13541744194.shtml

The result is more clearly shown in the following link:

http://tech.sina.com.cn/focus/2007search/index.shtml

For the search market,

9/2006 9/2007

9/2006

9/2007

Baidu

61.9%

69.5%

Google

24.1%

23%

Yahoo

5.2%

2.3%

Sogou

3.2%

1.8%

Others

5.6%

3.4%

For the portals:

3/2007

9/2007

Sina

34.5%

36.2%

sohu

26.1%

23.4%

Ntes

20.1%

17.7%

Yahoo

10.8%

8.8%

QQ.com

7.3%

7.5%

The following article gives the name recognition of the search engine

http://tech.sina.com.cn/i/2007-09-16/17321742430.shtml

Search Engine Name Recognition

3/2007

9/2007

Baidu

81.7%

86%

Google

61.5%

67.1%

Yahoo

28.9%

23%

3721

3%

1%

Sogou

32.1%

27.1%

Soso

4.6%

5.2%

Sina

12.4%

10.1%

Ntes

4.1%

3.1%

MSN

1.5%

1.1%

First, the result gives a snapshot of the users preference for the three cities in the east coast. There maybe difference between the cities in the east coast and west coast. But more importantly, this survey doesn’t take into account of rural population.

In addition, some “independent” survey is not very independent at all. But I don’t know CIC and therefore can’t verify whether it is biased or not.

A quick summary:

For the search market:

Baidu is doing really well. Google went down from last year but went up from 6 months ago. All the smaller search engines are getting smaller.

For Sogou, it may have an extremely small market share (1.8%), but it does have a very large name recognition (27%). It may not be the 1st choice for many users, but it is probably the 2nd or 3rd choice for a lot of users.

It strikes me that Baidu is really running away from the field. Google is a very distant second. Yahoo and Sohu’s Sogou may have a fighting chance to survive if the top two stumbles.

For the portals:

The result shows that Sina is increasing its distance from Sohu. The numbers for Sohu’s other properties (such as 17173, Focus, Chinaren, etc.) are included in Sohu’s number.

It is a little surprising in that Sohu had been pretty hot recently. Again, if rural population and west coast cities were included, Sohu won’t be fairing this badly. Sina had a reputation for users with higher education levels. Thus, it will have an inherent advantage for this survey.

But the trend is confusing as well. A possible reason could be that Sina had its blog, youtube, TV stations ready a good 6 to 9 months earlier than Sohu. Sohu just started these services and it hasn’t catch up to Sina’s head start yet. In addition, the effect of the Olympics hasn’t been felt yet.

In summary, Sina and Baidu have to be declared the winner at this point. Google is making a small comeback. But Google is not able to take market share away from Baidu. For Yahoo, it has to be disappointing in both Search engine and portal. For Sogou, it needs to keep on updating its technology and user friendliness. It still has an ace in his hand, the Olympics. For all other search engines, it maybe too late for them. Netease’s new search engine is still not out yet, but it may be a few years too late.

For the portals, Sina is sitting pretty. Its head start in coming out with blog, youtube, and TV stations, give it a competitive advantage. But Sohu has all of these now. In addition, Sohu seems to have an inside track on the Olympics. The game is not over by any means. Netease got to develop these web2.0 and video functions if its still want to stay in the game. China can support three major portals. Both Sina and Sohu are here to stay, if Netease screws up, then another will take its place.


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