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Google Seeing Red Star Fade In China: Alibaba Passes It For Ad Share

Google’s ambivalence about China seems to be taking its toll on the company’s market share and revenues. The Wall Street Journal is reporting that part-Yahoo-owned online marketplace Alibaba now occupies the number two position in the country in terms of advertising revenue share:

In a breakdown of Chinese online advertising market share, Beijing research firm Analysys International says Alibaba has overtaken Google for second place behind Baidu thanks in large part to its online shopping unit Taobao . . . Alibaba now owns a 9.3% market share and the number two spot in China’s online ad market . . . Google’s share fell 2 percentage points from the second quarter, when it held the number-two spot, to 8.9% in the third quarter.

According to the same research native search engine Baidu had a 73 percent share of the Chinese search market in Q3, while Google had 21.6 percent.

Google is trying to have it both ways in a sense, maintaining a kind of “vicarious” presence in China while not cooperating with the Chinese and no longer censoring internet results there.

Given the revelations that the Chinese government or its surrogates were behind the GMail hacking incident in January it’s difficult to stomach dealing with the government, which is required to do business in the country. Yet China remains the largest internet market in the world and, for that reason, almost impossible to ignore or write off simultaneously.

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