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Google China Rallies Ad Resellers

Economic Observer, 5/09/10

Google global VP John Liu and Google China GM of channel sales Lei Xiangfeng reportedly visited Guangdong-based advertising resellers on April 28. According to a source close to the agencies, one of Liu's missions of late has been to appease advertising agents. Liu visited Guangdong's Teamtop Technology, WinKee Network and other resellers. A source at WinKee said Liu's goal was to "pump up" resellers, assuring them that Google's "departure" only changed search users' habits, but did not affect Google's following, and that Google will continue to develop new products and continue its revenue shares with ad agencies.

Teamtop became Google's south China region reseller three years ago. In addition to its Guangzhou head office, Teamtop has branches in Shenzhen and Foshan and employs 500 people. It has nearly 300 agency partners in the Pearl River Delta region and serves over 30,000 customers.

One small south-China based website administrator that has been a Google ad customer since last year, however, said that traffic volume from Google had fallen 20% by April. The website plans to try using other search advertising providers, and perhaps place banner ads on portals as well.

Teamtop and Chengdu-based Pangoo Network have both become reseller's for Tencent's (0700.HK) Soso search engine. Another Google advertising reseller, Shanghai-based Hotsales Network Info Technology, has already signed on as a reseller for Netease's (Nasdaq: NTES) Youdao search engine, and is marketing both Google and Youdao to its clients through two marketing hotlines.

At least five Google ad resellers are believed to have signed on with Soso, while Netease reportedly signed 13 of Google's 27 ad resellers within two months of Google's move to Hong Kong. A source close to Google's resellers said that it is difficult for Google's agencies to make an immediate switch to Baidu (Nasdaq: BIDU), as the two rivals have different operating models.

From an overseas advertising perspective, however, Google is still seen as the top choice, as no other company can match its overseas presence, and so the resellers continue to remain partners with Google. Google has said that it continues to recruit new advertising resellers, particularly in the cities of Dalian and Changsha. One source close to Google's resellers reported that Google's current strategy is to hold onto its existing resources, while aggressively expanding its reseller network into certain foreign trade industries.

Keywords: online advertising Lei Xiangfeng Netease Internet strategy Teamtop Winkee Baidu Soso Youdao Google Tencent 0700.HK BIDU NTES John Liu online search


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