Shifting jobs and poaching executives show how much Microsoft and Google want the Chinese search market.
Greed is good.
— Gordon Gekko, Wall Street
Over 100 million people use the Internet in China. As a growing middle class swells those ranks, more will turn to the Internet for a variety of interests. Many of those explorations will begin with a query performed at a search engine.
That habit can feed a lot of search engine advertising with clicks, driving billions into the coffers of the search engines. There is no mystery concerning Microsoft and Google’s covetousness of market share in China. The 100 million users will grow in number, and with that growth will come big returns for the winner in the battle for search supremacy.
It appears no price to entry poses a barrier, or even a speed bump to either company. The Seattle Times reported recently that Microsoft plans to placate the Chinese government by outsourcing 1,000 jobs a year to Chinese firms. Microsoft CEO Steve Ballmer made that promise during a visit to China in 2003.
That claim comes from the testimony of Kai-Fu Lee, a former Microsoft executive hired by Google. The two companies have been fighting over Dr. Lee’s noncompete agreement in courtrooms in Washington state and California. Google hired him away from Microsoft to helm their nascent operations in mainland China.
“At the time of my departure, MS was on track to outsource over 1,000 jobs a year to China,” Dr. Lee testified according to court records. A Microsoft spokesperson did not deny this: “We are growing our work force there and will continue to do so; however, that growth has not and will not replace jobs here in Redmond,” spokeswoman Stacy Drake said in the Times article.
In documents filed with the SEC, Microsoft has only grown its operations by 500 net jobs per year from 2003 to 2004. Meanwhile, the two companies will find out in court this week if Dr. Lee will be permitted to begin his duties with Google, or if he will have to stay idle until a January court date.
David Utter is a staff writer for murdok covering technology and business. Email him here.
