Google to focus on mobile Internet in China

SHANGHAI (Reuters) - Google says it’s grappling with an unusual challenge in China’s Internet market -- how to cater to masses of Web surfers who go online for the first time via mobile devices, rather than migrating from PCs.

A laptop screen shows the homepage of in Beijing June 8, 2006. Google says it's grappling with an unusual challenge in China's Internet market -- how to cater to masses of Web surfers who go online for the first time via mobile devices, rather than migrating from PCs. REUTERS/Jason Lee

That is prompting the company to design new products tailored to the local market, and it may make more acquisitions in the country to help that along, Lee Kai-fu, Google Inc’s president for greater China, said on Thursday.

“China has a large mobile opportunity, with so many mobile users who will become mobile Internet users in the next few years as 3G and other technologies become pervasive,” Lee said in an interview.

“These mobile users have very different usage patterns from the American users. Most Chinese users who touch mobile Internet will have no PC at all.

“That requires thinking from ground zero on how to design products that fit their needs,” he said.

There are around 500 million subscribers to mobile communications devices in China, which has a population of 1.3 billion. With over 162 million Web users, China is the world’s second largest Internet market, after the United States.

Lee did not elaborate on how Google was re-designing products for China, but its foray into China’s Web market has included buying stakes in a range of companies from multimedia software to social networking firms.

Google does not rule out making more acquisitions to develop its business, Lee said.

It has also sealed several partnerships in China, including a news, advertising and search tie-up with major local portal Sina Corp.

In August, Google confirmed that it had acquired a stake in Chinese social networking Web site

It said in January that it had invested in China’s Xunlei Network Technology Co, which provides a person-to-person file sharing network and other downloading services, and is one of China’s largest online firms providing downloading services.

But while Google and Yahoo have been making inroads in China, analysts have said domestic operators such as, Baidu and Alibaba held a clear cultural and first-mover edge.

China’s Inc continued to dominate the country’s 812 million yuan ($109 million) Web search market with a 61.5 percent share in the third quarter of this year, according to research firm Analysys International.

Google followed with a 22.5 percent share and Yahoo China came third with 10.6 percent.

$1=7.481 Yuan