Google search share falls again in China

But Google says overall business in China has grown

The fallout from Google's decision to stop censoring its search results in China has brought a continued decline in the company's search business, according to a research firm.

The search engine giant saw its market share drop 6.7 percent in China for the second quarter, Analysys International said in a report on Wednesday. Google now holds 24.2 percent of the Chinese market, a significant change from the end of 2009, when that number was 35.6 percent.

Signs of Google losing its hold on the search market began when the company announced in January that it might possibly leave the Chinese market. By March, Google decided to stop censoring its search results in China, redirecting all users from its Google.cn page to its uncensored Hong Kong search engine. The actions worried Google's partners and advertisers, making some doubtful about whether they should continue business with the company.

That uncertainty continued earlier this summer, when users were left to wonder if Google could continue operating in China after the company's Internet Content Provider license went up for renewal. To win over Chinese officials, Google began to stop automatically redirecting users from its Google.cn page to the company's Hong Kong search engine. Later in July, the Chinese government decided to renew the license.

Analysys attributes these factors as to why Google has seen its market share decrease. "However the prior uncertainty is now settled. Therefore, Google will again be able to forge ahead in the search engine market," the report added.

A Google spokeswoman said the company does not comment on market share, but added that Google's overall business in China grew from the first quarter to the second quarter. The spokesperson also said the company has noticed that many Chinese advertisers continue to use Google as a way to promote their companies abroad.

While Google's market share has fallen, its rival, Baidu, has seen its market share only increase. Now the company commands 70 percent of the search market, a historical high, notes Analysys. Earlier this year, Baidu's head noted that its business was seeing a "marginal benefit" following Google's decision to stop censoring results.

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