Search engines: Could China be a boon for Bing?

As Google pulls out, Microsoft faces a delicate challenge in a red-hot market.

Microsoft’s Bing search engine has gained little traction in China since launching last year. In fact, there was even a slight hiccup before launch, as the company was forced to alter the search engine’s branding for the Chinese market: “Bing” can translate to either “cold” or “sick.” Now it seems the ongoing feud between rival Google and the Chinese government could provide an opportunity for Bing to gain share, but it won’t be easy.

In March, after a cyber attack on its servers, Google shut down its Chinese site and refused to continue censoring search results in accordance with local law, as it had done since 2006. The company now redirects traffic to its Hong Kong site where the search results are unfiltered, although Google acknowledged the Chinese government could still block access for mainlanders.

That would leave roughly 30% of the Chinese search market up for grabs. Microsoft declined to comment on its plans for Bing in China, other than pointing to a blog post written by CEO Steve Ballmer in January. Ballmer both reaffirmed the company’s commitment to “protecting and advancing free expression” in the world while simultaneously abiding by local laws, such as those in China that require censorship.

The uncertainty around the fate of Google’s operations in China has already resulted in changes for Bing. Motorola announced in March it struck a deal with Microsoft to add Bing search and maps to its smartphones that run on Google’s Android operating system in China. Meanwhile, China Unicom, the country’s second-largest wireless carrier, said it will drop Google as the default search engine on new Android phones and instead allow the handsets’ manufacturers to choose the alternative.

But Bing holds on to just a tinyfraction of the giant search market in China — less than 1% — and it faces an uphill battle in attracting more users. “The Chinese government has a preference for doing its best to promote and use homegrown technology,” says Augie Ray, a senior analyst with U.S. technology consultancy Forrester Research. The biggest beneficiary is likely to be Baidu Inc., the Chinese search company that controls approximately two-thirds of the market today.

Microsoft struck a hopeful tone in the state-controlled Chinese press, however. The company’s chief research and strategy officer, Craig Mundie, told the China Daily in March that Bing stands to gain share in light of Google’s troubles. He also chided Google for its relative inexperience in China compared to Microsoft’s long-standing presence. But an aggressive push into the Chinese search market could cause an image problem for Microsoft elsewhere. Google is now positioning itself as a champion of free speech, a tricky claim for Microsoft to make as it continues to censor search results. “Microsoft has got to step very carefully into this,” Ray says. “It will undoubtedly be difficult for them to capitalize much without giving the appearance of doing the sort of thing that Google wasn’t willing to do.