TECHNOLOGY

Google Looks to Get Back Into China

Company Hopes to Unveil New Store in Country It Mostly Exited in 2010

 

 Google's headquarters in Beijing, China in 2010, when the company largely exited most operations there following cyberattacks against Gmail users and disagreements with the government over censorship of search results. EUROPEAN PRESSPHOTO AGENCY

By 

ROLFE WINKLER,WAYNE MA

Nov. 20, 2014

Google Inc. is considering bringing a version of its Play mobile-app store to China, a tentative but important step back into a country that Google mostly exited in 2010.

In recent months, Google representatives in Asia told makers of apps for its Android mobile-operating system that it hopes to unveil a new app store in China to help them distribute their apps and games more efficiently, according to two people briefed on its plans.

In Google’s absence, there are multiple Android app stores in China, spawning piracy and prompting many developers to hire large teams just to manage relations with the stores. In the U.S., just two app stores dominate— Apple ’s App Store for iPhones and iPads and Google’s Play Store for Android mobile devices.

To bring order to the app chaos in China, and boost revenue, Google wants to open a version of its Play Store there, offering a single entry point through which Android apps and games could be distributed, one developer briefed on the plan said.

A Google spokeswoman declined to comment.

The company’s efforts are at an early stage and face significant obstacles, including stiff competition. Google would be entering “very late into a heavily populated market with very strong major players,” said Mark Natkin, managing director of Chinese research firm Marbridge Consulting.

Among the Chinese companies that run popular Android app stores are computer-security firm Qihoo 360 Technology Co. , search-engine Baidu Inc. and online gaming and social-networking company Tencent Holdings Ltd.

Google would likely need to partner with a Chinese company to help it host apps and games in data centers in the country, say the people familiar with its plans. It might also have to build separate user identification and payment systems, added one of these people.

Working with a Chinese partner that would run the app store and split revenue with Google might help the company with censorship issues, said a former Google executive.

News of Google’s effort was earlier reported by technology website The Information, which said Google has discussed its plans with handset makers such as Huawei and ZTE and wireless carriers that must provide billing services.

A ZTE spokesman declined to comment. A Huawei spokeswoman said she was unaware of any discussions with Google but said “the entry of a key industry player” would benefit Chinese smartphone users.

Former executives say Google is eager to get back into China, the world’s largest smartphone market by shipments. Google’s Android operating system powers the vast majority of those phones, but Google isn’t profiting because its apps, including the Play Store, aren’t officially available.

Google abruptly ceased most operations there in 2010 following cyberattacks against Gmail users and disagreements with the government over censorship of search results.

Google makes money from the Play Store by keeping a percentage of sales generated by app and game makers. It is one of the company’s fastest-growing businesses, contributing to 50% year-over-year growth in Google’s “other” revenue in the third quarter.

“We have a lot of partners in China and we work and meet with them,” Google Senior Vice President Sundar Pichai, who oversees Android, said in an October interview with The Wall Street Journal. “We work with a different set of constraints in China, obviously, so it’s tough to predict how that will evolve. We are committed to serving the market the best we can.”

Mr. Pichai described the app ecosystem in China as “very dynamic,” adding, “It’s a bit of a Wild West. But we are there to support it.”