Bottom line: Google’s event to promote entrepreneurs in China is its latest effort to curry favor with Beijing, and could help it win permission to open a local version of its Google Play app store by year-end.
Internet giant Google (Nasdaq: GOOG) is quickly joining Facebook (Nasdaq: FB) as one of China’s biggest fans, as it looks to re-enter the world’s largest online market with a launch of its app store and possibly its Nexus smartphones. Less than a month after its AlphaGo computer wowed Chinese audiences by beating a world champion at the ancient board game of Go, Google’s China chief has just wrapped up a major local event aimed at helping the country’s legions of budding entrepreneurs.
Anyhow who lives in China knows that words like “entrepreneur” and “creativity” have become buzzwords from Beijing and local governments, which are desperately trying to boost the private sector to offset numerous problems in the big state-run establishment. Google’s event looks highly designed to play to that campaign and curry favor with central leaders as part of its broader ambitions to re-enter the market.
Google certainly isn’t alone among tech firms in trying to win favor with Beijing through this kind of public relations effort. Mark Zuckerberg is another big China fan, visiting the country numerous times and hobnobbing with top officials as he seeks entry for his Facebook (Nasdaq: FB) empire, which is currently blocked in China. Apple (Nasdaq: AAPL) CEO Tim Cook is also a big China fan, visiting the country regularly and launching several initiatives last year in line with Beijing’s goals of cleaning up the country’s environment.
Apple has clearly benefited from its efforts, winning positive media coverage and becoming the first major foreign company allowed to offer electronic payment services in China with the launch of its Apple Pay in February. (previous post) Google and Facebook are both enviously eyeing China with their own ambitions, and are taking a page from the Apple playbook with their recent moves to serenade Beijing.
In the latest move of its China press, Google has just held its first ever Google for Entrepreneurs event in China, attended by the company’s Greater China chief Scott Beaumont himself. (Chinese article) The event is filled with the kind of buzzwords that are currently high on China’s agenda, including Google’s commitment to offer funding, guidance and even sales resources for entrepreneurs.
This particular event comes just a month after Google’s AlphaGo computer charmed and fascinated China by easily beating Korean Go master Lee Sedol by a 4-1 margin in a 5-game series. Shortly after that, Google’s recently named CEO Sundar Pichai made his first trip to China in his new role, visiting a school dedicated to the ancient board game. (previous post) During that visit, local media reported the school plans to issue its own formal invitation to challenge AlphaGo by the end of the year.
The AlphaGo match-up almost certainly pleased Beijing, since it shined a spotlight on Chinese culture and also showcased the big potential of artificial intelligence. At the same time the story captured the public’s imagination with daily reports of progress in the match, creating a feel-good tale with the message that ancient culture and artificial intelligence can co-exist and challenge each other.
This kind of story is far different from the one 6 years ago, which saw a frustrated Google shutter its China search service after refusing to follow Beijing’s tough self-censorship rules. At the time, some said Google’s move was partly public relations and that it didn’t have much to lose financially, since it was rapidly losing market share to homegrown Internet search giant Baidu (Nasdaq: BIDU).
Fast forward to the present, when Google seems to be having second thoughts about its earlier decision due to the explosion of the Internet in China, especially the mobile Internet. China is now easily the world’s largest Internet and smartphone market, which has created a thriving app development culture that Google would like to join. The company has made numerous moves over the last year that indicate it wants to launch its Google Play app store in China soon. (previous post) Formal permission from Beijing is probably the last major hurdle before it can do that.
In addition to all of its PR efforts, Google has also forged a partnership with fast-rising local smartphone giant Huawei, which is now a manufacturing partner for Google’s own brand of Nexus phones. These latest PR-ish moves with AlphaGo and now the entrepreneurial event all indicate Google believes it’s moving closer to getting the green light to re-enter China that it so desperately wants. Accordingly, I stand by my earlier predictions that it should finally get such permission by the end of this year.
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