Google today announced that it has acquired a stake in Chinese community site Tianya.cn, a strong move into the world’s second-largest internet market (162 million users). According to Reuters, a Google spokeswoman confirmed the stake holding, which is rumored to be anywhere from 10% to 60%.
The move appears to be part of Google’s plan to acquire one or two Chinese internet companies while investing in five others over the next year in an effort to increase market share. Google originally focused on melding technology with existing Chinese portals, working with Sina.com, Soso.com, and 163.com. Google also made an investment in the Chinese browser Maxthon. When these deals are analyzed in conjunction with Beijing’s granting Google a license to provide domestic internet content, there is little doubt that Google will inch closer to China rival Baidu.com, which holds a 58.l% share of the Chinese search market, well ahead of Google’s 22.8% and Yahoo! China’s 11.6%. Essentially, the Tianya.cn stake means one down, four to go. What other projects may Google be considering? Duncan Riley at TechCrunch has some ideas:
“The Chinese acquisition strategy for Google would not seem as difficult as might immediately be presumed; a number of the leading Chinese search companies are listed on the NASDAQ. Market leader Baidu sits at the less appealing (from an acquisition viewpoint) market cap of $5.73 billion, however lesser players are well within a more likely price for a Google acquisition; No 2 ranked search player* NetEase.com (163.com) has a market cap of $1.78 billion and third placed Sohu.com has a market cap of $1.08 billion.”
All that aside, it’s clear that Google is interested in bringing its particular brand of entrepreneurship to China. It’s current project with Tianya.cn is Tianya Wenda (Wenda means ‘ask and answer’), a questions and answers site similar to Google’s free Russian Q&A site Otvety. Both sites use the same Google Apps framework. Luyi Chen at China Web2.0 Review has more info on how Wenda works:
“When you post a new question, the service will show you similar questions on the right side. And the list is dynamic. You can change the title during writing the post, the right side question list and the suggested tags will change accordingly. But it seems content of the post won’t affect the suggestions. Google is really good at such kind of Ajax suggestions. It’s surely better than Baidu Zhidao, which gives a static one-time similar question list.”
The site itself is very straightforward. However, the nature of Google’s partnership with Tianya.cn is not. Tianya, launched in 1999, has been a forum for politicians to answer citizens’ questions. As one can imagine, there is a high degree of censorship, both self and externally imposed. Notably, while Russia’s Otvety was marketed as Google.ru when it debuted, Wenda barely makes mention of Google (aside from its structure). An explanation of why this is from Philipp Lenssen at Google Blogoscoped:
“This would be Google’s first .cn site accepting user registrations… except that the site is using Tianya’s ICP – the Internet Content Provider number is a badge handed out by the Chinese government to mark self-censorship conformant, legally operating .cn sites – and you will not be able to use a Google account for Wenda.”
Essentially, Google is using Tianya for its ICP (pending approval of its own). A more touchy issue is how Google will deal with the regular self-imposed censorship that Tianya.cn and other sites follow in order to retain their ICP. Conceivably, since Tianya is a more independent partner, Google could deny knowledge and responsibility for any censorship that occurs on the site, but the issue is sure to generate more controversy as Google expands its Chinese holdings.