Local search engines in Korea and China have a lion's share of the market. The ability to leverage future developments in the mobile search arena will help all players stay in the game.

Last week, we analysed how the strong contenders of the search engine industry in China and India are stacking up against each other and how Google figures in the competition.

Japan
Japan has one of the more mature internet markets in Asia with a penetration rate of 68.7 percent and more than 87 million internet users. Yahoo is the search leader in Japan, followed by Google and Goo, a Japanese search engine. Baidu, which recently entered the Japanese market, is now in the fourth place. Baidu recently announced translation services and the ability for advertisers and ad agencies to do business with Baidu in Japanese as well as pay for ads in yen.

Google recently changed their home page to include tabs instead of utilising universal search that has been adopted in much of the rest of the world. This may indicate that Google believes a different approach is needed in Japan, one that mirrors Yahoo's portal approach.

South Korea
South Korea has the highest internet penetration rate in Asia with 71.2 percent, which translates into nearly 35 million users. Naver, which is part of the NHN Corp., the largest internet company in South Korea, is the leading search engine with 72 percent, followed by Daum with 11 percent, while Google holds a share of less than five percent. Naver delivers results from a variety of sources, not just web pages.

What makes Naver so special is not the technology as a search engine, but its user base "Knowledge-In". This allows users to ask and answer questions on anything from the fastest way to reach a destination to how best to learn English. Readers rate the responses and the people who have asked and answered questions based on the quality of their answers. The responders then earn points to become "peasants", "commoners", "citizens" etc., all the way up to "gods", with "the sun god" ranking being the highest and most prized.

As the search engine wars are heating up all over Asia, we make an analytical asssessment of how certain developments will shape the search engine market in Asia in the near future.

Mobile search
The mobile phone is well on its way to becoming the dominant internet platform. According to a recent study by eMarketer, there are more than 405 million mobile internet users worldwide, and that number is expected to grow to 982 million by 2011. The number of mobile search users in 2007 was estimated at 327 million, and that number is predicted to grow to more than 900 million by 2011. 

The narrowing gap between the average number of searches that a user does on their desktop and the number of searches he or she does on the mobile is opening up new opportunities for search engine providers. More specifically, a huge factor on who wins the search engine war in Asia hinges on search engines' ability to develop business relationships that would help both parties leverage their capabilities and offer the appropriate services. In this case, it would be beneficial for search engine providers to develop relations with telecommunication providers to target the emerging cohort of mobile internet consumers. We are already seeing such partnerships beng forged between large telecommunications companies and search engine providers across Asia.

A case in point is Yahoo, which has made great strides in developing strong relationships with mobile carriers in the Asia Pacific region. In China, Google and its formidable rival Baidu, are partnering up with large telcos such as China Unicom and China Telecom. In addition to relations with the telcos, search engines are reaching out to mobile phone manufacturers to provide search engine solutions.

Capturing new eyeballs
The online community in Asia is seeing significant growth in terms of the number of new internet users trawling the net on a daily basis. It would bode well for search engine companies to capture these new users. A key feature of capturing new eyeballs would be to ensure the search engine service is in fact user friendly to them.

Some things remain. Ultimately, what will help search engines win the war for consumers is their ability to deliver the most relevant results to the local community. This will take a substantial amount of localisation. Baidu and Naver, the local search companies of China and Korea respectively, are making good use of their knowledge of the local market and the user customs and cultural habits. But as seen with Google's dominance in some other Asian markets, the war for users is still anyone's to win!

David Temple is regional head of search at Neo@Ogilvy.