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Google Market Position Slips As Baidu Capitalises

Google's dominant position on the global online search market slipped slightly in the second quarter, as it retreated from the Chinese market, research firm Strategy Analytics (SA) said on Friday.

Google's market share fell to 69.7 per cent in the June quarter from 71.1 per cent in the previous three months.

"Google's search revenue growth continues to slow down as the Western search market reaches maturity and Google struggles to gain share in the fastest-growing Asian markets," said Martin Olausson, analyst at Strategy Analytics. "As a company, it will become increasingly more important for Google to find significant new revenue streams in order to offset decelerating growth in search," Olausson said.

Google unexpectedly warned in January it might quit China over censorship concerns and after suffering a hacker attack it said came from within the country, but eventually terminated its search service and started rerouting users to its unfiltered Hong Kong site.

The biggest gainer on the global scale was China's Baidu, fourth-largest search provider globally, which almost caught up with Yahoo and Microsoft.

"Baidu has capitalized on Google's retreat from China and the overall rapid growth of the Chinese search market," Strategy Analytics said.

Baidu's global share rose to 4.6 per cent, with Microsoft controlling 4.8 per cent of the market, and Yahoo 5.4 per cent.

The global online search advertising market hit $6.2 billion in the second quarter of 2010, up 2.7 per cent from the previous quarter, Strategy Analytics said. (Reporting by Tarmo Virki, editing by Will Waterman)

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