After six years at the helm, Dr. John Liu will step down as CEO of Google China in August of this year. During his time as CEO, Google saw its market share in the country get as high as 17%, but now the search engine giant has dropped to a meager 2%.
How has a company that has been one of the most successful in the United States so drastically struggled in China? Google has a strained relationship with the Chinese government which still controls anything and everything that its citizens can access on the internet.
In the second quarter of 2009 Google China hit 29% of the market pushing their top competitor, the "Chinese Google" Baidu to 62%. Shortly after Google began to push the hometown Baidu for internet dominance Google suffered a cyber attack it believes came from the Chinese government. The cyber attack specifically targeted information on human rights activists within the country. After threatening to leave China, Google decided to move in a direction that would hurt the Chinese government far more. They decided to stop complying with the strict Chinese internet censorship policies and open the information floodgates. Google began redirecting users in China to the Hong Kong Google site which is not under the same restrictions as on the Chinese mainland.
As you would imagine the Chinese government didn't take too kindly to this and moved Google and it's servers to Hong Kong, then disabled certain searches, and in some cases blocked the links in their entirety.
Baidu has since recovered and last month secured almost 70% of page views. Baidu is currently only being challenged by another Chinese company, Qihoo, a longtime anti-virus software company that recently joined the search engine market. Qihoo saw just over 15% of the page view market last month. Qihoo developed its search engine in late 2012 and started off very strong.
Until China opens up the internet for its citizens, I don't see Google moving beyond the current fraction of the market it possesses. It cannot and should not return to censoring information on behalf of the Chinese government. The current relationship between the company and China can still be described as frosty at best with little hope on the horizon. Dr. John Liu is leaving Google China with a diminished market share, but pushed back against the Chinese government late in his term in a manner they've never been pushed before or since. That's something he can hang his hat on and I'm sure Google is saddened to see him leave.