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Is Google Chasing Baidu Again?

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Absence has apparently made Google's (Nasdaq: GOOG  ) heart grow fonder.

The Wall Street Journal is reporting that the world's largest search engine provider is hiring more engineers, salespeople, and product managers in China.

It's been two years since Google staged a public retreat from China, arguing that the government's restrictive ways make it impossible to run a search engine and maintain one's integrity. Redirecting visitors of Google.cn to a Hong Kong-based website that offers uncensored results has been an imperfect plan. The Chinese government occasionally blocks access to Google, forcing users to either cope with the frequent outages or rely on homegrown solutions.

Even at its peak, Google wasn't commanding half of the traffic that dot-com darling Baidu (Nasdaq: BIDU  ) was drawing. And if Google resented the way that China forced search sites to block any references to the Tiananmen Square massacre, how's it going to feel now that China's Ministry of Public Security is requiring search engines to list five state-owned banks at the top of every page?

However, Google isn't beefing up its presence in China to see if it can regain market share in search.

The growing global popularity of Google's Android mobile operating system finds it wanting to play a bigger role in that success.

Last month, Dell (Nasdaq: DELL  ) teamed up with Baidu to roll out the first smartphone running Baidu Yi, a mobile operating system that's essentially a modified version of Google's open-source Android.

If even Baidu is on the Android bandwagon -- to a certain extent -- why can't Google be big in China again?

Google apparently isn't eyeing traditional search. A few months ago it rolled out a comparison-shopping engine for local stores in China. Its top goal right now appears to be launching its Android Market app marketplace in China.

If Big G is able to re-establish its reputation in China -- and consumers can trust Google's reliability -- we might very well find ourselves at the search engine quandary.

Baidu has only gained market share in Google's absence, but it's not as if a worthy rival has stepped up as a legitimate silver medalist in China. Sohu.com's (Nasdaq: SOHU  ) Sogou is growing quickly, but it's still a very small player. Microsoft's (Nasdaq: MSFT  ) Bing could have been the Western fave to take advantage of Google's partial retreat, but that's not the way it ultimately played out.

So, yes, Google's hiring in China, but this doesn't mean that it's taking aim at Baidu and the smaller search engines in the world's most populous nation.

Baidu and Google have been winning stock recommendations for Rule Breakers newsletter subscribers, but now it's time to discover the next Rule-Breaking multibagger. It's a free report. Want it? Get it.

The Motley Fool owns shares of Google and Microsoft. Motley Fool newsletter services have recommended buying shares of Google, Dell, Microsoft, Baidu, and Sohu.com. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


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Rick Munarriz
TMFBreakerRick

Rick has been writing for Motley Fool since 1995 where he's a Consumer and Tech Stocks Specialist. Yes, that's a long time. He's been an analyst for Motley Fool Rule Breakers and a portfolio lead analyst for Motley Fool Supernova since each newsletter service's inception. He earned his BBA and MBA from the University of Miami, and he now lives a block from his alma mater.

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7/1/2015 3:59 PM
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