Although China may now have more Internet users than the United States, Google has yet to find a way to turn them into a significant revenue stream.
After withstanding criticism of accepting Chinese censorship as a condition of setting up operations in China, and engaging in a court fight with Microsoft after poaching one of its highly regarded Chinese researchers, Google didn’t have a lot to show for it in 2007.
Google’s money-making prowess has yet to turn into a successful effort in China. Bloomberg cited a Credit Suisse estimate in guessing Google took in $71 million in ad revenue from China in 2007.
That figure would be less than a percent of Google’s 2007 overall revenue. The company makes virtually all of its money from advertising, notably the text-based paid search ads that appear alongside its search results.
That business model has been under attack by rivals like Microsoft, which turned to a hostile bid for Yahoo in an effort to make up ground in search engine market share. Google CEO Eric Schmidt criticized that proposal recently.
“We would be concerned by any kind of acquisition of Yahoo by Microsoft,” Reuters said Schmidt told reporters. “We would hope that anything they did would be consistent with the openness of the Internet, but I doubt it would be.”
We wonder how that idea of openness squares with China’s recent ban on YouTube, the video sharing site Google owns. China shut off access to YouTube after videos of Tibetan protests against Chinese rule hit the service. That doesn’t sound very open.
