Google aims to boost ad business

Google Inc, the US search giant, plans to boost its operations in China on display advertising, mobile services and advertising for Chinese exporters, amid negotiations with the Chinese government about its presence in the world's largest Internet market.

Karim Temsamani, its Asia-Pacific chief, said in an interview in Singapore that the organization is "constantly in dialogue with the Chinese government", and that he believes ongoing dialogue will continue to be vital.

However, he added that there was nothing specific to announce at this stage.

The company's peak in China came in the fourth quarter of 2009, when it took up 35.9 percent of China's online search market, after Chinese rival Baidu Inc.

However, last year, Baidu had 78.6 percent of the market, while Google's share had shrunk to 15.6 percent, according to domestic research company Analysys International.

Faced with declining market share, Google aims to focus on its advertising services that enable Chinese small and medium-sized enterprises to export overseas, said Temsamani.

He added that SME spending in its top 10 growing markets in the Asia-Pacific region was growing at a higher rate than in the United States.

Lai Yun, vice-president of Milanoo.com, a Chengdu, Sichuan-based wedding dress retail website, said it spends 6 to 9 percent of its revenues on Google's services for overseas marketing.

The company, which does only export business, had a revenue of "hundreds of millions of yuan" last year.

"Google's revenues in China are mainly from its export business as it remains a quality channel for domestic advertisers to do overseas marketing," Analysys International said in a research note.

Google is also pushing its mobile business in China with services that enable advertisements to be shown on mobile applications, Web pages, mobile search results and online videos.

Advertisement requests through Google's mobile products increased by 120 percent from July 2011 to July 2012 in China, one of its top five countries by advertising request volume, John Liu, its corporate vice-president, said last year, adding that its mobile advertising activities are its fastest growing in the country.

In September and December, Google shut down its music and shopping search services in China, saying the two had failed to meet expectations.