Google’s Path Back Into China Includes a Host of Local Partners
Early this month, news broke that Google was developing a mobile version of its search tool intended to comply with Chinese censorship rules. Senators and Google’s own staffers responded with anger at what some said was a betrayal of the company’s core democratic values.
But the search and advertising giant has been laying the groundwork to fully return to China for years, including through a multitude of local partnerships. According to new reporting by the Wall Street Journal, those partners include developers who use its digital infrastructure, as well as companies that use Google ads to reach customers outside of China. Those partners have been proactively cultivated by Google CEO Sundar Pichai, who has visited China frequently. Google has also invested in Chinese companies, and has hundreds of employees in the country—about half of them in sales.
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Most obviously, Google’s Android operating system, which is free for manufacturers, dominates China’s smartphone market. Android versions on Chinese phones don’t currently include Google search, limiting ad revenue. But the same manufacturers also sell full-function Android phones outside China, and one estimate claims Google makes as much as $10 billion in yearly revenue from those phones.
Google has also reportedly been in talks with China’s Tencent about jointly offering cloud computing services. Google sells ads that help international shoppers find Chinese e-commerce sites (which have a sharp competitive advantage over U.S. counterparts thanks to skewed international postal rules), and its revenue in Asia is growing strongly.
According to the Journal, Google’s push for growth and partnerships in China is partly intended to ingratiate the company with Chinese authorities. Showing that it’s contributing to local economic growth would make it easier for Google to gain approval from the ruling Communist Party to launch its search engine there—if it can mollify its critics at home.