Chinese Search Engines Thrive
in a Chaotic Market
By James Wang

     A recent profusion of Chinese websites, coupled with dramatic increases in Chinese net users, has created a new prosperity for Chinese search engines in Mainland China.  Internet Content Providers (ICPs) in China are thriving in an admittedly chaotic market. As a consequence, it is becoming critical for the ICPs themselves to adjust the quality of their service, business operations and pricing policies, to effectively compete and enhance transparency and market order for the success and survival of a healthy Internet industry.

Booming Engines

     Over the past two years, dozens of Chinese search engines have come into existence. Standouts among the first crop of ICPs in China include Sohu, Sina, ChinaByte, Netease, Goyoyo and 5415.

     Inspired by the great success of Jerry Yang's Yahoo!, the world's No. 1 search engine, and building on their familiarity with Chinese networking and Chinese markets, these Yahoo! emulators are dreaming to become the next great domestic China success story.

     Chinese search engines appeared without too much delay patterned after Yahoo!, including Goyoyo.  Sina (formerly Richwin) added search functions in early 1997. Netease quickly followed suit. In June 1997, 5415 established a large-scale Chinese website databank, focused on being "completely Chinese" and serving all Chinese users on the net.

     Sohu (or Sohoo), launched in early 1998 as China's "own detector on the line," and is a closer follower of Yahoo! whose stronghold is with its manual indexing service. Comparatively, Sohoo enjoys a higher admiration among Chinese Netizens, second to Yahoo! Chinese.

     Other engines such as ChinaByte were not far behind. ChinaByte's search engine Cseek.com is the first to offer Chinese full-context searching engineered by 'spider" robot. Without hesitation, a Chinese version of Yahoo! joined the competition in mid year.

Poor Services

     Most engines promote Chinese searching as their core service. Yet the databases upon which the search is based, are often limited. As a result, the information that can actually be collected falls short of providing a precise and wide-scale Chinese based search.

     5415 is largely regarded as the search engine, which contains the most Chinese sites, currently over 50,000. It is followed in number of Chinese sites by Sohu and the Chinese Yahoo. Unfortunately, the first two provide only a limited scale search based on keywords.  Speed is another obstacle.  Many visitors complain that they have to wait too long before they are told "0 matches."

     Many engines have established their information channels as an appendix, with a news appendix being the most common. Others�such as travel, business, entertainment, sports, and computer forums�are frequently available. Sina is regarded as the most successful search engine in these sectors. Visitors attracted by these channels are contributing greatly to the 100,000 hits of the whole site every month. This might be poor for many English sites, but is encouraging to Chinese ones.

     ChinaByte is excluded from this format. ChinaByte's core value is with its IT website, Cseek.com is its later appendix. Sina is primarily praised for its up-to-the-minute news postings. Also, its BBS services has a leading role in China. Sina's traffic is significantly built on its frequent promotional campaigns. Richwin's buy-out of Sinanet made it a big show in the country.

     The oversupply and imitation of channel service case waste both time and space. Visitors often complain that they get the same news story written by the same reporter in different news channels. Most are copying or digesting reports from Xinhua News Agency or People's Daily. A Chinese Drudge Report seems to be a luxury at present. ChinaByte's IT news has also suffered from this "copy and paste" ICP's as its content is original.

     Other channels don't have important features�ranging from lack of frequent updating or real time and features information services to lack of attractive or easy to understand graphic presentations.

     Some engines are popular because they offer free services.  Free email boxes, e-magazines or homepages are desirable to most visitors.

     Netease is a best example. Actually, its revenue is not based on its search engine, but on free services and related software peddling.

Chaotic Market

     The biggest obstacle to the business operations of most Chinese search engineers is the chaos and disorder in the market.  Harsh competition has also resulted in irrational pricing and poor balance sheets among most.

     Although Internet services are widespread, China is far from becoming a mature market.  The number of net user pales compared to the immense population.  And while net services are popular in big cities like Beijing, Shanghai, and Guangzhou, they are often not available in the countryside.

     Some engines may use the overall population's unfamiliarity with Internet services to set harmful pricing policies.  Random pricing for online advertisements is probably the most frequent problem.

Healthy Competition

     In early April 1999, leading ICPs in Beijing reached an agreement to form the China ICP United Development High Profile Conference.  ChinaByte is the initiator of this Union.

     This organization is expected to help pave the way for a healthy competitive arena and to set up business rules accepted by all.  The conference called for regulation of the domestic market designed to promote quick and healthy expansion of Chinese information services on the net. The organization will also take united action to promote Internet-related training and education in the near future.

Yahoo Threat

     Most Chinese search engines fear Yahoo!'s active entry into the Chinese market. While Chinese Yahoo! is not the best among the currently operating engines, its background, worldwide reputation, and growth potential pose huge threats to all the others.

     Actually, Chinese Yahoo! is the most reliable Net guide service available for Chinese Netizens.

     Yahoo! is expected to invest more time and effort on sales promotion for and improvement of its Chinese version in late 1999. Yahoo! may challenge all the existing engines and require them to make changes or take new directions of their own.

     Some of the Chinese search engines may merge, some may shift their business focus and some will lose the battle for existence completely.  The promotion of Chinese Yahoo! promises a storm on the horizon of the Chinese search market.  Users will ultimately benefit from the growth and changes to come; business enterprises will finally get the best online ads platforms, but at what cost? Coming to the end of 1999, Sohu, for one, is bound to find that making one million dollars is not so easy as it was in 1998.