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This article was published on March 22, 2010

The High Stakes of Google’s China Retreat

The High Stakes of Google’s China Retreat

It is important to once again profile the stakes as Google pulls it’s products from China. Earlier this month, McKinsey Quarterly profiled some very telling data released by China Internet Network Information Center that puts additional perspective on what Google is potentially walking away from. At the end of the day, 50 million Chinese may soon have to stop using Google.

The key market stats from the survey are impressive, yet have not deterred Google from their position:

  • There are 384 million Chinese internet users, already more than the entire population of the United States
    • That is an increase of around 50 percent over 2008
  • 233 million Chinese—twice as many as in the previous year— use mobile web access because of recent launch of 3G services
  • Users in the 60 largest cities spend around 70% of their leisure time online
    • For smaller cities that number is 50%
  • Online advertising has grown at 20% to 30% a year and the market was around $3 billion last year.

Additional research shows that Social Media in China is catching on and is being used even more frequently than in some Western countries, such as the UK even though it is not the Western brands that are succeeding.

There is no doubt that Google will be seeking to keep a foothold in China, but its own long march back into the market will indeed be long and arduous.