Shares in Google fell $8.34 or 1.72% to 476.65 after the bell in New York in extended after-hours trading, although investors remained uncertain as to why the latest denial service had been put in place. Shares in Baidu, which has a 70% share in China to Google's 24%, were up 2%.Earlier this month, Google appeared to have secured its place behind the "Great Firewall of China" after months of uncertainty when it struck a deal to allow it to continue it search business, stopping the automatic reroute to Hong Kong. User who tried to log in to Google.cn were automatically redirected to its Hong Kong page.
Analysts estimate China accounted for as little as $300m of Google's annual revenue of $24bn last year. Google's dominant position on the global search market was shown to have suffered slightly, with Strategy Analytics reporting that Google's market share fell to 69.7% in the three months to the end of June, from 71.1% in the prior quarter.
Source: http://bit.ly/9z7B3O
Analyze the impact in terms of the long term business implications for Google, its competitors and Internet users in China.
ReplyDeleteHi Martin and Kwan Hui, quite interesting topic here.
ReplyDeleteIn my opinion, Google is going to loss a large amount of users in the long term basis, as China has the largest population in the world, especially, internet use in China is growing fast now, the Chinese Government said that 45.8 million people were online, it could just simply imply that Google is losing this largest internet market, uncountable clicks for the sponsor links from Google Advertising will be gone and directly it will affect the revenue of Google and a lower figure might appear in the financial statement of Google. For the competitors of Google, such as the largest search engine in China, Baidu, Sogou, and etc, it will be good news for them as they do not have to compete with a great competitor, they are protected as well. For the internet users in China, they might be restricted and could not accept other news that is not published in the website that they are able to access. Not only Google, China has also banned many other website as well, such as Youtube and even this blogger that we are using now and also the most popular Facebook. They only can access those websites by using illegal actions. I heard my friends who are studying in China are complaining about this as they could not access to those websites they used to and it is troublesome for them to communicate with friends that are not in China.