Google vs. Baidu and the Chinese technology market

Escrito el 15 Septiembre 2005 por Ricardo Pérez Garrido en Asia

The same week Google announces that it raised $4.5 billion from a secondary share issue, Baidu.com -China’s leading search engine- lost close to a third of its market value, with a current value of $83.32 down from 153.98 less than a year ago. There is great interest in the Chinese market coming almost from every technological niche. Not only for its value as trend setting in the evolution of manufacturing or use of technological innovations, but also for its growing capabilities as technology provider.

The demmand for information flowing in and out of the new China is growing exponentially, and with millions willing to buy more and more technology, advertising invesment follows the same path. The demand for telecommunication services is also growing at fast rates, and a growing percentage of the population is willing to get on board of the latets technology services. This scenario is promising not only for those in the news almost every week for building the new internet, but also for the rest of the industry. The telecoms are looking at the regional chinese markets closely.

Telefonica just entered the market with a 5% stake at China Telecom, second operator in the country, with more than 80m clients and oriented to broadband services.
Learning to compete in a country that is creating the rules of the game as they move forward in the world market for… everything, is probably a good strategy for any of the western telecom companies. While they fight their own battles trying to create infrastructure for new broadband services, china is a good market for additional expansion. Several questions arise as to their capacity to rapidly adapt to the special rules that the Chinese market follows in all its aspects. Again the challenge is the collaboration with companies in different industries and cultures, developing services for markets with different levels of development and usage trends. Those that can develop new capabilities in real time and learn how to adapt them to changing environments and technologies will be in a good position to create competitive advantages. Flexible and cooperative information systems will be at the centre of that evolution, entering a market with such complexity and size as China, a great excuse to work on those skills. But this is a different story.


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