Market potential

The Chinese search market, backed by the world's largest Internet population of 350 million, enjoys great growth potential in terms of either search requests or revenues of search service providers.

Chinese Internet users made 203.38 billion search requests last year, up 35.7 percent, including everything from shopping and travel to video and social searches, said the latest statistics from iResearch's monitoring system on Internet users' behaviors, iUserTracker.

iResearch's 2009-10 report on China's search engine development shows revenues of Chinese search engine operators in 2009 totaled 6.95 billion yuan ($1 billion), up 38.2 percent from the previous year's 5.03 billion yuan ($736.46 million).

Three reasons account for the steady growth of China's search market last year despite the global economic slump, said the iResearch report. First, the Internet economy has improved and advertising clients increased expenses for online advertisements since the second quarter of 2009. Second, the economic crisis promoted large advertisers to recognize the efficiency of search engine marketing. And third, search service providers were active in introducing all kinds of marketing tools and strategies, delivering much quicker responses than traditional publications were able to.

China's search market will generate revenues of more than 10 billion yuan ($1.46 billion) this year, up 44.5 percent, and is expected to exceed 25 billion yuan ($3.66 billion) and 39 billion yuan ($5.7 billion) in 2012 and 2013, respectively, iResearch said. This is because advertisers will renew their marketing expenses this year as the Chinese economy continues to recover, and those who had already recognized the advantages of search engine marketing will increase their online advertising expenses, said iResearch.

Coaxing Google users

Domestic search players will not simply absorb Google's market share—they will have to formulate different strategies to persuade Google faithfuls to convert to their search engines, said iResearch.

China's highbrow users love Google because many of its web and desktop applications were fun, easy to use and guaranteed a great user experience, said the iResearch report. For instance, many professionals in the information technology industry are accustomed to using Google's featured search services—blogs, Google Earth, academic works and books—to find professional entities.

Because of this, Google was able to develop a loyal following, a trend other search engines will find difficult to break into in the short run. A number of Google followers are likely to try any technical means to access Google.com.

Search engine operators have to win Google's user base by improving their own R&D efforts and brand building, said Cao Junbo, chief analyst with iResearch. Cao recommended domestic search engines consider cooperation with Google Inc. to catalyze future successes.

Cao also suggests search service providers find segments of the search market that have been left unoccupied after Google's withdrawal. They also have to strengthen cooperation with Internet content providers to target different users for quick market entry and user recognition, he added.