14 DAY TRIAL // Google continues to struggle in China, as the government becomes more aggressive in blocking services it doesn't like, more recently Gmail. Google pulled out its search efforts last year after China attacked and infiltrated the company's infrastructure. But Google is not giving up on the market, confirming what it said when it moved its search operation to Hong Kong.
In fact, Google is doing better than ever in China, in terms of profits. December was Google's most profitable month to date.
Of course, that has more to do with the fast growing ad market in China than with anything that Google is doing.
According to the Wall Street Journal, Google is still trying to expand in China and make the most of its situation. The lure of the biggest internet market in the world is too great even for Google.
The online ad market in particular is interesting, according to analysts, it grew 46 percent in 2010 and is expected to grow a further 40 percent this year.
This is why Google is making more money than ever, even if its market share in search and online ads is shrinking. But it's not a sustainable way of doing business.
Even if Google may be making more money, Baidu and the other players are growing ever bigger and, as Google knows best, size is one of the greatest assets for an online ad company.
At this point, the internal market is much less valuable and interesting for Google, most of its business is for Chinese companies looking for international exposure and buying ads to run on Google.com globally. It makes sense too, plenty of Chinese companies are looking at the export markets to bring in revenue.
But Google is also looking at other ways it can generate money in China and also at ad products that would work better internally and are less dependent on its search engine.