internet - Google losing traction in China

Billsdue points at this report in The Red Herring, indicating that Google has started to loose market share in the high-end user section where it had been able to dominate Baidu, China's largest domestic search engine. Google has been losing out in Beijing, Shanghai and Guangzhou, according to the research company IntelliConsulting.

In Beijing, the only city for which detailed results were made available, Baidu’s market share rose by 13 percent from one year ago to 65.4 percent, the survey showed. Google fell by 12.3 percent, from 32.9 percent to 20.6 percent.

That is a rather dramatic drop and bad news for a company that only started to invest seriously in China at the beginning of this year. Moving into China had brought the US company only bad news, as they are losing the strong position they had before they were present in China. Billsdue rightfully points at the other US giants, Yahoo and Ebay, who have a similar bad record.

Can any large US Internet company succeed on its own China? The record--Yahoo, Ebay and now Google--is not encouraging.

Update I: China Net investor writes that the market share of Google has slipped more than 10 percent. That is one way of counting. I would say they have lost more than 30 percent of their market.
Update II: China Web2.0 comes with another report by CNNIC documenting the drop of Google. Although less dramatic than the other report, the drop is still remarkable. I find the two explanations for the drop not really convincing - although I do not have a better one myself. Key word blocking has always been in place, so that could not explain the difference, unless Baidu has improved greatly in the past year. Making Google more local could perhaps work out in the future, but does not explain why it was then so successful in the past when it was not even present in China.
Meanwhile many of the freshly-hired Google-employees are according to rumors in the market leaving the company again because they have no faith in its future. This all needs some thought.
Update III: Jake Ludington also takes a shot at the Google' problem in China.

Among people I spoke with from the tech community, the prevailing opinion is that Google isn’t taking China seriously. By dictating business decisions about China from Mountain View, CA in the U.S., the opinions feel that Google isn’t making an effort to understand the Chinese search market.