Google To Buy Into China

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Google (GOOG) plans to make several acquisitions in China over the next several quarters, according to TechCruch.

GOOG market share there trails China search engine Baidu (BIDU) by a large margin. By some measures, BIDU has as much as 60% of the market.

GOOG cannot afford to be so far behind in the world’s second largest internet market. Buying in may be the only way to solve that.

The most likely candidates would seem to be portal Sina (SINA) and Sohu (SOHU). Sohu’s market cap is just over $1 billion and SINA;s is about $2 billion.

GOOG has little to lose buy putting $5 billion into owning large internet properties in China. It would almost assure the huge search company of a large presence there.

The only question is whether the communist Chinese government would kick about it.

Douglas A. McIntyre