Abstract

The case is about US-based technology giant Google’s Chinese sojourn. Google entered China in 2000 and started operating in the country by offering 24 million web pages in the Chinese language and gained immediate popularity. By 2003, Google was ranked #1 in China’s search engine market. But after that Google losing market share as its servers were placed outside the country and the search was slow. In 2006, Google decided to place its servers in China and censor the content according to the standards set by the Chinese government. Even after Google censored its search, the website was blocked intermittently, as the government was not satisfied with Google’s censoring. In January 2010, Google announced that it would no longer censor its search in China and it was contemplating an exit from China. Thus, Google closed the door on one of the largest internet markets in the world. But the market for the internet and mobiles in China continued to grow. By 2015, local companies emerged in the areas of search, social networking, and mobile internet. Most of the mobile phone manufacturers in China used Google’s mobile operating system Android, customizing it to the needs of the local users and also created their own app stores. But Google was not deriving any revenue from the apps or through mobile advertising in China. This made Google take a relook at the market. The sheer market size of China made Google change its stance and consider reentering the country in a big way.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Evaluate the entry and expansion strategies of Multinational companies in China.
• Examine the importance of the Chinese market to the growth of Internet companies from developed countries.
• Outline the issues and challenges faced by internet companies in China.
• Analyze the business environment in the Chinese online media industry.
• Evaluate the impact of government regulations on the operations of foreign internet companies in China.

Keywords

Google, China, Reentry, Foreign Internet Companies in China, Emerging markets, censorship, government and business, internet, international business, government policies, government regulations