Google To Increase Investment In China

from TechCrunch by Duncan Riley

Google is looking to acquire "one or two Chinese internet companies" and will invest in five in the next 12 months as part of a continued push to increase market share in the worlds fastest growing internet market.

Google has previously focused on building partnerships in China, with Google technology powering Chinese search portals Sina.com, Soso.com and 163.com. Google also made a strategic investment in popular Chinese browser Maxthon in April.

The Chinese acquisition strategy for Google would not seem as difficult as might immediately be presumed; a number of the leading Chinese search companies are listed on the NASDAQ. Market leader Baidu sits at the less appealing (from an acquisition viewpoint) market cap of $5.73 billion, however lesser players are well within a more likely price for a Google acquisition; No 2 ranked search player* NetEase.com (163.com) has a market cap of $1.78 billion and third placed Sohu.com has a market cap of $1.08 billion.

Baidu.com currently dominates the Chinese search market with a market share of around 55%

* traffic rankings per Alexa May 2007. 

(in part via PC World)