Google have just announced that hundreds of websites owned by China Telecom will now show advertisements sold through Google's AdWords advertising system. Google has been forging ties with telecommunication companies in the world's second largest internet market, in a bid to stay on a level footing with rivals Baidu, China's most popular search engine, and Microsoft, who are trying to gain a foothold in the Chinese search market.
Internet use in China has increased massively in recent years. In January 2006, a study by CNNIC estimated that there were upwards of 105 million internet users in China, having grown from 45.8 million in June 2002. This growth is set to continue in online advertising, with Credit Suisse Group estimating that by 2011, online advertising revenue in China may increase by up to seven times from $420 million in 2005 to $3.1 billion.
The deal with China Telecom will extend to four hundred of the company's local websites. The websites serve as business directories to the Chinese population, with different websites tailored to different cities in the country.
Google has partnered with other Chinese companies in the past in order to increase the search giant's 17 per cent market share in the country and to make a dent in Baidu's 58 per cent slice. In January this year, Google and China Mobile signed a deal to allow mobile phone users the ability to search directly from their handsets.
What's more, China's second largest internet service provider, China Netcom, entered into an agreement that sees Google implement their search function on the company's Cncmax.cn domain.
Western companies have made a significant effort to gain a foothold in the Chinese online market in recent years, with both eBay and Yahoo! pioneering partnerships with large Chinese companies. Google has also come under fire from China's government in the past for not censoring search results, and thus launched a "self-censored" search engine in January 2006.
