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According to MarketWatch, Google (NASDAQ: GOOG) has cut a deal with China.com, part of CDC Corp. (NASDAQ: CHINA) to supply search functions for several of the company's websites.
Google needs the deal. Unlike the U.S., where the big search company has half the market, in China Baidu.com, Inc. (NASDAQ: BIDU) has 60% of the search market by some measures. This leaves Google with little leverage with advertisers in the world's fastest growing and second largest internet market.
The Google deal puts it in bed with a second tier company, so it may have to do a number of these. CDC has a market cap of $951 million compared to Baidu at $7 billion.
It may be that Chinese consumers do not want to use a U.S. technology. Baidu did not come by its No. 1 spot by accident.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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