Google wants to make a comeback in China, so much so that the tech giant is said to have built a censored version of its search engine for a new launch in China, a market which Google has been blocked from for nearly a decade after a brief four-year existence from 2006 to 2010.
Does Google stand a chance this time around? Few people are as qualified to answer the question as Kai-Fu Lee, the former Google executive who headed its first China effort and then left to set up his own venture capital firm in Beijing.
“Re-entry is always difficult, because either you are acknowledging that what you did earlier was not right, or you are not. Either way, there is some trickiness to it,” Lee said onstage at TechCrunch’s annual Disrupt conference Wednesday in San Francisco.
But the bigger question is: After nearly 10 years, does China still needs another search engine?
The answer is probably no, according to Lee, who has worked in the epicenter of the Chinese tech scene since he left Google in 2009.
“The entire dynamics is different; People aren’t looking for another search engine or an app store. New companies are emerging, addressing previously unknown customer needs. Innovations are coming out, and new graduates generally prefer working for Chinese companies.” Lee explained. “And lastly, the heads of multi-nationals are really just professional managers. If they were to compete against local entrepreneurs, who are ‘gladiators in this coliseum,’ I don’t think American companies will have a high chance of succeeding in this environment.”
During the four years from 2005 to 2009 of Lee’s leadership at Google China, Google’s China market share grew from nine percent to 24 percent (the American version of Google, Google.com, was available in China on-again, off-again before the official China launch) and revenue was climbing close to $1 billion.
“[Things] were pretty good,” Lee recalled.
But shortly after Lee’s departure in 2009, Google closed its China branch, reportedly due to intensifying disagreements with Beijing, as well as the U.S., over how much content to censor in search results.
Lee’s departure didn’t appear to be related to Google China’s ensuing shutdown; he confessed in a recent interview with Bloomberg that he didn’t learn about the closing until it was made public.
“The existing internet giants in China have a very strong hold in the market,” Lee told Observer backstage. “The ‘parallel universes’ [of China and the U.S.] represent very different user habits that are difficult [to adapt to] for any American companies that enter China, as well as for any Chinese companies that enter America.”
However, Lee said Google may have a better chance landing in China with some of its secondary products that are not its search engine.
Google may already be on this path, aside from its censored search engine launch. Earlier this year, Google parent company Alphabet’s self-driving unit, Waymo, obtained a license from Beijing to road-test its autonomous vehicles in China. Two weeks ago, Waymo set up its first China branch in Shanghai.