Several publications have reported Google and China Mobile are in talks. The talks are reportedly around Google getting its search engin on China Mobile's phones, which could be a huge opportunity for GOOG. Google has said over and over they believe the mobile opportunity is large and all internet players continue to point to the fact there are 2x the amount of cell phones than pcs in the world. Google is already serving mobile ads in Japan and is using the country as a kind of test market. A potential partnership with China Mobile could be significant for GOOG considering they are China's largest cell phone provider with approximately 260M subs. While Baidu [BIDU] is currently the leader in search in China, they have yet to make any strides in the mobile arena. A partnership wtih China Mobile would immediately provide GOOG access to a large audience and catapault GOOG's brand awareness in the country. Given the popularity of mobile phones in China, I believe a strategy focused on developing as many partnerships in the mobile arena is the right one and expect many mobile partnerships in ASIA PAC to be announced in the coming months.
Google also announced a mobile partnership with KDDI in Japan today who will integrate Google's search engine into its mobile offerings.
Alibaba, who now owns Yahoo!'s search engine, stated they are not currently focused on the mobile opportunity in China, which could be a mistake for the company. They are currently focused on taking share from Baidu, but I believe given the massive amount of cell phones in China relative to PCs, this strategy is the wrong one to take. Although Alibaba has three very popular brands in China with Alipay, Taobao and Alibaba, all of which can be used to promote Yahoo! Search on PCs, I still firmly believe given the 2-1 cell to pc ratio globally and actually larger in china, both Baidu and Alibaba are setting themselves up for failure over the long-term if they continue to ignore the mobile search opportunity. I believe China is a market that in many ways is the opposite of the U.S. in the sense that what we use on our PCs we also prefer to have access to on our cell phones. However, given the dynamice in China, I believe it makes more sense that users will likely use the products and services they have access to via their cell phones on their pcs. This is a dynamic I will continue to follow and report on in the future.
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