Google Cuts Ad Contracts in China as Search Share Drops Again

Google, which continues to lose search market share to rival Baidu in China, yesterday confirmed that they terminated the contracts of seven large AdWords resellers. Meanwhile, Google’s search market share in China dropped from 27.3 percent in the Q2 to 24.6 percent in Q3, according to Beijing research company iResearch.

The Financial Times reports that the “overhaul is part of Google’s attempt to adjust its operations after it moved a large part of its online search from its mainland Chinese site to its Hong Kong site where it is not required to censor results on behalf of the government.”

“We hope to find new resellers to partner with so we can provide even better service to our advertisers,” Cindy Qin, a spokeswoman for Google told Reuters.

Google vice president John Liu yesterday said that China is still an important market for Google and the company will “continue to provide the best products and services for users in China as in other markets.”

Meanwhile, Baidu’s market share climbed to 72.9 percent in Q3, according to iResearch.

“Baidu sales people could use this opportunity for customers hesitating between two search engines to use Baidu instead of Google,” Fiona Zhou, an analyst with JLM Pacific Epoch, told Reuters.

Also yesterday, Baidu combined with Japanese company Rakuten to launch Lekutian (which means “Happy Cool Day” in Chinese), a new Chinese online shopping mall. China is the world’s largest Internet market, with more than 400 million users.

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