Google cuts ties with Chinese advertisers

July 27th, 2010 - 4:29 pm ICT by IANS  

Beijing, July 27 (IANS) Google Inc has cut commercial ties with two of its Chinese advertising agents, raising concerns that the internet giant’s recent standoff with the government may scare away more domestic advertisers.
The search engine ended partnerships Monday with the Universal Internet Media and the Xi’an Weihua Network, major advertising agents for Google in east and northwest China, Marsha Wang, spokesperson for Google China, was quoted as saying by China Daily Tuesday.

The two are among 25 of Google’s authorised advertising agents in the country.

“The partnerships ended a couple of weeks ago because both sides felt there were no longer any mutual benefits,” Wang said.

Google had announced earlier this year that it would stop providing filtered results in its search service and redirect all mainland traffic to its Hong Kong site, following which a number of its advertisers expressed concerns and reduced their spending on the search engine.

Google’s market share in China dropped to 24 percent in the second quarter of this year, from 31 percent in the first quarter, research firm Analysys International said.

The market share of Baidu, Google’s rival in the Chinese market, hit a record high of above 70 percent during the past three months.

Cheng Yu, general manager of Zoom Interactive, a Google authorised advertising agent in Beijing, said his company will continue its partnership with Google.

“Many advertisers still trust Google’s advertising network so we will continue to do business with them,” he said.

But he also said his company does not have many alternatives to Google, as Baidu has already built up its own advertising system and other domestic search engines such as Tencent and Sohu are still too small to partner with.

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