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An Inside Look At Google China
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Key Moments
Google is betting on a long-term strategy to win in China by building a world-class local team and products, despite challenges in user behavior and market dynamics.
Key Insights
China's internet population is growing at 25% annually, projected to become the largest globally, with broadband users already surpassing the US.
A significant challenge in China is the younger internet demographic, with users prioritizing entertainment (games, music, video) over traditional browsing and search.
Google's strategy in China centers on a long-term view, emphasizing building a strong local engineering team and developing products tailored to Chinese users, rather than immediate profit or market share.
In 2006, Google China focused on establishing a foundation, including a locally compliant website and initiating marketing to universities, planning for a 'year of harvesting' in 2007 with improved search quality and product rollouts.
Google employs an 'R=D' (Research=Development) model for innovation, believing that individuals who generate ideas are also capable of engineering them into products, fostering a culture of self-starters and empowering employees.
The Google Seattle and China offices are collaborating on projects, with a flexible team structure allowing employees to work on cross-Pacific initiatives, adapting Kirkland-developed technologies for the Chinese market.
The immense opportunity and unique challenges of the Chinese market
China presents a massive, rapidly growing internet market. The internet population was accelerating at 25% annually in 2007, fast approaching US numbers and on track to become the world's largest. Broadband adoption in China had already surpassed the US, particularly in metropolitan areas. The mobile phone user base was staggering at 440 million, with many users experiencing the internet for the first time via their phones rather than PCs. Furthermore, China graduates 8.5 times more engineering students than the US annually, offering a vast talent pool. However, challenges abound: the Chinese internet user base was younger and more interested in entertainment (games, music, video) than knowledge-seeking or traditional browsing. Internet cafes often lacked browsers, with users primarily engaging in entertainment. A strong sense of community existed, evident in the 1 billion daily page views on bulletin board systems (BBS), a concept largely defunct in the US. The lack of a widespread credit card system hindered e-commerce and advertiser tracking. The market was highly dynamic with rapid changes and aggressive competition, often described as a 'wild west'. A persistent perception of failure for multinational internet companies in China also loomed, a 'mystery' Google aimed to disprove. This complex landscape demanded a nuanced approach, balancing immense potential with significant cultural and infrastructural hurdles.
Google's long-term commitment and foundational year
Google's strategy in China was defined by a long-term perspective, encapsulated by Eric Schmidt's statement that Google has '5,000 years of patience' for the Chinese market. Unlike approaches focused on immediate profit or market share, Google committed to winning over Chinese users by building superior products. The focus was not on short-term gains but on a deep commitment to the market and its users. The previous year (2006) was characterized as a 'year of planting,' focused on building foundational elements. This included establishing a local presence, creating a Chinese website (google.cn) compliant with local laws, and adopting a Chinese name to aid accessibility for users unfamiliar with spelling 'Google'. Marketing efforts were directed towards universities, identifying them as a source of future users and early adopters. Key partnerships were initiated, including one with China Mobile, and strategic investments were made. Most critically, a world-class engineering team was built, laying the groundwork for future growth and product development. The plan was for 2007 to be a 'year of harvesting,' marked by significant improvements in search quality—aiming to be the best in speed, coverage, freshness, and features—and the launch of localized and modified Google products.
Building a world-class local team
Central to Google's success strategy in China was the creation of a strong, local R&D team. The belief was that only a team embedded within the market could truly understand Chinese users and build products they and their families would want to use. This contrasted with the idea of sending a team of Americans or Chinese Americans who might lack in-market insights. To achieve this, Google established engineering centers in key talent hubs: Beijing (announced 2005), Taipei (2006), and Shanghai (2007), with plans for more. They actively sought out talent where it resided. A significant effort was made to bring Chinese Googlers from other global offices to China to seed the culture. In 2006, Google China hired approximately 100 people, a challenging task given Google's high hiring bar. This made Google an immediate top employer among Chinese computer science graduates, with nearly 100% acceptance rates for offers. The team included world-class talent, such as programming champions from ACM and Google's own Code Jam. The hiring strategy involved bringing in senior talent from abroad, including Chinese Americans, alongside local campus hires, fostering collaboration between these groups. Beyond direct hiring, Google leveraged its popularity on campuses and its strong brand appeal, engaging with students through talks, books, and programming competitions to attract 'friends of Google' (frogs).
Tailoring products and approaching market opportunities
Google recognized that its brand advantage in the US did not automatically translate to China. Therefore, a core focus was on improving search quality for the Chinese language, acknowledging that existing Chinese search engines were generally lower in quality than their English counterparts. This gap represented a significant opportunity for Google to laboriously improve relevance, user experience, UI, and features. Beyond core web search, Google identified several adjacent search opportunities crucial for the Chinese market: News Search, Image Search (popular among Chinese users), Book Search (given China's status as the world's largest book publisher), Scholar Search (already seeing significant traction and use in Chinese universities), and Blog/BBS Search (vital for news gathering). Client software was another area, addressing the prevalent issue of malware and spyware on PCs, presenting an opportunity to offer useful software while raising user awareness. Local search was seen as a significant untapped market, with opportunities in areas like restaurant searches, real estate, and classified ads, potentially integrating with mobile services. Mobile itself was a huge opportunity, with 440 million users, and even non-WAP services like SMS presented avenues for search and information delivery. Video and music were also identified as big but challenging markets due to complex licensing and copyright issues.
Innovation model: R equals D and 20% time
Google's innovation philosophy is anchored in the principle 'R=D' (Research=Development), meaning they hire individuals who are both innovative and capable engineers. This approach combines idea generation with product development, eliminating the friction and potential politics of technology transfer between separate research and development teams. The company aims for self-starters who are motivated and can admit failure. A key enabler of this innovation is the famous '20% time' policy, allowing employees to spend a fifth of their work time on projects of their own choosing, provided they align with Google's mission. Ideas gaining significant internal support can gather momentum, leading to prototypes developed collaboratively. Successful prototypes move to Google Labs for further testing, then to beta, and finally become official products. This model has spawned numerous successful products like Google News and Google Scholar. Google also embraces a real-time, user-centric approach to product development. Instead of relying solely on hypothetical market surveys, they often launch multiple versions of a feature (e.g., displaying 10 vs. 30 search results) and measure actual user behavior to determine which performs best, leading to faster and more accurate product improvements. This innovation model is considered particularly suited to the internet industry.
Collaboration between Google China and Google Seattle
A special and important relationship exists between Google China and its sister office in Kirkland (Seattle area). This collaboration is crucial for leveraging worldwide R&D and building products for both China and the global market. The Kirkland office, established in 2004, had grown to over 200 engineers by 2007, contributing significantly to products like Google Maps, Google Video, and Google Talk. Recognizing the synergies, Google explored dedicated teams to bridge the Kirkland and China offices. This involved adapting successful technologies developed in Kirkland for the Chinese market, often requiring modifications beyond simple localization. The goal was to harness the fast-growing opportunities in China while utilizing the strong engineering talent in Kirkland. Employees involved in this cross-Pacific effort had the flexibility to work from Kirkland, potentially move to China for short or extended periods, or manage projects from either location. This flexible transfer policy underscored Google's commitment to talent mobility and leveraging its global workforce effectively.
Mentioned in This Episode
●Software & Apps
●Companies
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●People Referenced
Common Questions
China presents a massive and rapidly growing internet population, with substantial broadband penetration and a vast number of mobile users. The high number of engineering graduates also presents a significant talent pool for tech companies.
Topics
Mentioned in this video
A popular Craigslist-like website in China, mentioned as an example of local classifieds sites.
A restaurant search website in China, mentioned as an example of local search opportunities.
A platform where 20% time projects are showcased and measured for user reception before potentially becoming beta products.
A product developed by Google Kirkland with potential applicability in China.
A product developed by Google Kirkland with potential applicability in China.
Mentioned as an expertise that Google is looking for in potential hires, particularly for server-side roles.
Mentioned as an operating system for which Google is interested in developers, particularly for client-side applications.
A classified search website in China, mentioned as an example of local search opportunities.
A real estate search website in China, mentioned as an example of local search opportunities.
Google's academic search engine, which is seeing significant usage and influence in Chinese universities, with professors even ranking themselves by its results.
Mentioned as a potential solution for the widespread malware and spyware issues affecting PCs in China.
An experimental Google site for local search results, including restaurant ratings.
A product developed by Google Kirkland that has applications and potential modifications for the China market.
A product developed by Google Kirkland with potential applicability in China.
A product developed by Google Kirkland with potential applicability in China.
A Google Fellow who visited China and explained technology to professors.
Head of Google News, mentioned in the context of senior leadership visits to China.
President of Greater China for Google, discussing Google's strategy, team building, market opportunities, and R&D approach in China.
Mentioned for his quote about Google's long-term view in China, comparing Google's patience to China's 5,000 years of history.
VP of Product Management at Google, mentioned in the context of senior leadership visits to China.
Kai-Fu Lee's boss, shown receiving Chinese uniforms.
Partnered with Google in mainland China for mobile opportunities, leveraging its large user base and SMS services.
Mentioned implicitly as a competitor in the Chinese search market, to which Google aims to provide superior quality.
Mentioned as a search engine whose Chinese quality is noted as lower than its English counterpart, indicating an opportunity for Google.
A partner in Japan with whom Google is working to expand mobile services, learning from experiences to deploy in China.
Mentioned as a lack in the Chinese market, with approximately 30 copycat services existing; licensing rules are unclear.
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