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"Google has vision but its execution in China wasn't strong. They don't get the nitty-gritty nuances and are not close enough to the market," said Quinn Taw, a Beijing-based venture partner at Mustang Ventures who has held senior positions at Mindshare and Zenith Media in China.

Until recently, for instance, Google.cn had the same clean, sleek look of Google.com, even though Chinese web surfers, particularly in the early days, preferred clicking on popular search topics rather than typing in search characters. Baidu's site reflected that preference from the start.

"With its massively popular Tieba forums, a question-and-answer service and a wiki, Baidu leveraged Chinese netizens' natural propensity to share and create content and seamlessly integrated it in to the overall search experience way before Google's attempts," said Sam Flemming, founder and chairman of CIC, an internet research and consulting firm in Shanghai.

tionalism and corruption. When Baidu issued its IPO in late 2005, about one-third of Baidu's users were music fans using the site's online music file-sharing service, which operated much like Napster. Baidu didn't earn revenue from the music downloads, but music attracted tens of millions of Chinese to its site and helped make it the No. 1 search engine player. As an American company bound by U.S. laws protecting intellectual property, this growth tactic was not open to Google. Music companies, of course, hate Baidu's music-sharing site. The major labels such as EMI, Warner Music Group and Vivendi's Universal Music have tried suing local sites that allowed illegal downloading, including Baidu, with minimal success in court and little support from Chinese consumers.

Unlike Baidu, Google made another mistake in refusing to offer rebates for volume media buys, a common, if not always legal, practice in China's media industry. (

Media buyers "couldn't give Google money if they wanted to," Mr. Taw said. "Their sales guys were very arrogant, superior and hard to get hold of. They went out of their way to be jerks."