• by Laurie Sullivan , Staff Writer @lauriesullivan, January 14, 2010

Mathew McDougall tells me it will become "disastrous" for American firms to reach a Chinese audience once Google.cn shuts down.

SinoTech Group's chief executive officer and executive chairman says establishing a paid search account on Baidu isn't easy for Western companies wanting to advertise in China. His search firm, along with others, will need to spend more time brokering deals between advertisers and search engines, and less time optimizing campaigns.

Different search engines in China attract specific types of consumers. Without Google, the audience segments become blurred, McDougall says. He explains that Google might be a better choice for advertisers wanting to reach educated, professional and "upwardly" mobile user groups. On the other hand, Baidu dominates in cities where the average Chinese consumer resides.

Most companies Bill Hunt supports in China advertise on Google and Baidu for both paid search and SEO. The president of Back Azimuth Consulting, Hunt agrees that Baidu supports more consumer-product-focused categories, while Google leans toward business-to-business.

And while Baidu.com typically attracts your average consumer in China, it has something to offer consumers living in Western countries, too. Baidu.com had 223,000 unique U.S. visitors in December 2009, according to The Nielsen Company. But that will change this year.

The change has been initiated by the Chinese government. Late in 2009, local Chinese search engines began to increase their presence in China's market. Tencent, for example, announced it would create its own search capability. Sina reported dropping Google's indexing technology to develop its own. The portal NetEase also has been working to develop its own search capabilities.

McDougall, who has been in China for seven years, calls search the fastest growing digital advertising segment in the country. He has seen major changes in the past 18 months, and expects many more to come this year, fueled by Google's alleged decision to leave China.

Andrew Goodman, founder and president of Page Zero Media, tells me his clients are only beginning to explore Chinese opportunities. "Baidu cannot possibly be as transparent or conscientious as Google, and Baidu has not earned a trustworthy business reputation by Western standards," he says. "No one would begrudge Google's right to leave China. Everyone would hope that the government's practices would improve enough so that companies like Google feel comfortable returning."

Actually, Google hasn't confirmed it will leave the Chinese market, but at least one insider tells me that Google China employees have been asked to take time off as the company tests the network infiltrated by hackers trying to access Gmail accounts of Chinese human rights activists.

Senior Google executives note concerns about finding jobs, considering the company name now presents a black mark in the eyes of the Chinese government. "The Google senior executives can't go into private enterprise in China, because most are associated [with] the Chinese government," according to the source.

Many, including Google China, employees believe Google.cn will not continue online much longer.

Basically, China hasn't made it easy for Google to operate in the country. One source told me the Chinese government targeted the search engine to take the hit on political issues since it began operating in the country. Last year, during a pornography crackdown, Baidu escaped without scars, while the Chinese government penalized and punished Google China.

Similar to Google China, images the Chinese government wishes to censor have disappeared from Microsoft's and Yahoo's search engines. Microsoft confirmed its corporate network wasn't compromised, but declined to comment on its practice to censor search results, or how the company will move forward to support advertisers if Google.cn disappears.

Meanwhile, two days after Google reported it would leave China unless the nation's censors eased up, the Chinese government offered an indirect response: Companies that do business in China must follow the laws of the land, according to The New York Times.

Search marketers in China suggest Google will never reach No. 1 status in the country. Some note that the way leadership at Google China changes frequently adds to the confusion.

China will always have a local Chinese search engine dominating the search market -- the country must, to demonstrate political and technological dominance.