Valleywag points us to an interesting article in the Financial Times which highlights five markets in which Google plays second fiddle to local rivals — Russia, the Czech Republic, Japan, Korea and, you guessed it, China.
In Russia and the Czech Republic, Mohammad Gawdat, a Google executive who oversees 112 countries in Europe, the Middle East and Africa, admits rather squarely that Google was late to the game there and performs poorer than its rivals, Yandex and Seznam in terms of the quality of local language search results. Meanwhile, Naver handles about 60% of search results in South Korea and Yahoo Japan claims slightly over half of the search market simply because local netizens prefer portal-like services instead of "pure" search engines like Google where there appears to be little else to do.
As for China, Google CEO Eric Schmidt says his company's weakness is due to nothing other than "bizarre" local regulations that are unfavourable to foreign players. He says to the Financial Times:
“Because Baidu had such a head start largely because of the various bizarre laws that China has with respect to foreign media. It will take a while, but we will eventually do well there.“All of us should tell the Chinese that their local markets need to be open to foreign investment, they need not favour their local competitors.”



ironic that this comes up just as lots of netizens seem to be jumping ship to google after the sanlu-baidu conundrum.
i guess without the hardcore traffic stats it's impossible to tell though
^ Good point, Stoli.
However, regardless whether people bail and use Google because of the sanlu/baidu scandal most people will continue to use Baidu - the reason for this is that Google has too much information that hurts the average Chinese person on the net. Some people can't handle the truth.
Baidu's mp3 search capability really gave it the advantage
Baidu has absolutely no idea what is "do no evil"