Seven Years On, Google Holds a Press Conference in China Again — Only to Announce a Go Match

AlphaGo is going to Wuzhen to play China's Go masters,

After three years of talk, Google is finally bringing a big business to China.

That was our first thought a few days ago, when the invitation to the press conference arrived.

In recent years, Google's public communication in China has amounted to small media briefings about art projects, translation and advertising. It had never invited more than 100 outlets to a press conference, the way it did this afternoon.

The event itself was mysterious. The conference began at 3pm on a Monday; the invitations went out at 9am that same morning.

Word that Google was building a business in China has been circulating for years. In 2015, after the company reorganized into Alphabet, executive chairman Eric Schmidt said Google wanted to "serve the whole of China."

Google founder and Alphabet CEO Larry Page said in November that year, "We do have quite a bit of business in China, and would like to do more. I'll leave that to [Google CEO] Pichai now."

A few months later, Scott Beaumont, Google's president for Greater China, sent a New Year video greeting from Hong Kong, timed for the 2016 Spring Festival.

There was harder business news too. According to information QDaily obtained from people familiar with the matter, Google had set up a market team of several people a year earlier to study bringing the Google Play app store into China. By December 2016, it had also held an Android developer conference in China, urging developers to use Google to distribute their apps abroad.

This March, at the Two Sessions, Liu Binjie, chairman of the National People's Congress Education, Science, Culture and Public Health Committee and former head of the General Administration of Press and Publication, said "academic [search] may be the first to be allowed" into China.

Last week, the Google Translate mobile app became downloadable inside China.

All of it raised expectations.

The fantasy collapsed on the day of the press conference. The address on the invitation read, simply, China Qiyuan — the national Go institute. The venue was a second-floor banquet hall inside it, with red LED letters over the entrance spelling out "Press Conference for the China Wuzhen Go Summit."

Today's event had three co-hosts: the Chinese Weiqi Association, Google, and the Zhejiang Provincial Sports Bureau. AlphaGo will take part in a Go summit in Wuzhen from May 23 to 27.

There will be three formats. First, Ke Jie will play AlphaGo head to head in a best-of-three match — unlike the fast games against Lee Sedol, each side gets three hours per game.

After that, AlphaGo will pair up with two human players to take on a team of human players. Last comes a team match: AlphaGo against a team of five humans, who will be allowed to talk and confer with one another to see whether they can beat the algorithm.

The AlphaGo showing up this time is newer still than the version that beat Lee Sedol and than Master, the pseudonym it played under online. Earlier this year, the new version beat every opponent it met online, including Ke Jie — 60 games, not one loss.

Over the nearly hour-long conference, Google looked like a co-host at best. Scott Beaumont spoke for under 10 minutes, politely introducing the event and noting that the translation app now works.

Then the microphone went to officials from the General Administration of Sport and the Zhejiang Provincial Sports Bureau. Four government officials spoke in turn about the long history of Go, Zhejiang's cultural standing, and their own hopes for Ke Jie's challenge to AlphaGo.

Ke Jie began by praising his opponent: "AlphaGo is an incredible team. Google is a great company. AI will bring good things to our future lives. I believe the future will be changed by them." Then he declared his resolve, saying he would meet the machine "with the mindset to win and the conviction to fight to the death."

Fine. But this is nothing like what Chinese users were hoping for.

Seven Years On, the Google Services Chinese Users Want Most Are YouTube and Search

AlphaGo is probably not the Google product Chinese users want most right now.

By the current numbers, the Google product people in China know best, after Search, is YouTube.

Baidu Index data shows that over the past year, "Guge" — the Chinese name of Google's search engine — is no longer the Google product Chinese users search for most. YouTube is.

AlphaGo ran hot for a while last April, when it beat the South Korean player Lee Sedol, but attention faded. Even when it disguised itself as a human to play Chinese masters earlier this year, it stirred little discussion.

Stretch the window to seven years and you see that after Google became inaccessible in 2010, mentions of its search engine thinned out year by year. YouTube went the other way: its search volume crept up as entertainment clips were reposted en masse inside China.

WeChat Index data confirms the trend. In Moments, which more Chinese users scroll through every day, YouTube is the most talked-about Google product, far ahead of Search and Maps — largely because funny YouTube videos get screenshotted or reposted to domestic video sites.

QDaily ran a survey yesterday on which Google products people are waiting for. Of the more than 30,000 votes we received, the most widely recognized product was still Google's search engine (22.4%), with the video site YouTube second and Google Scholar, used to look up academic papers, third.

Among Google's new products of the past two years, AlphaGo is the only one to reach the general public. Because they can't be used properly in China, two services that are hugely popular abroad — Google Assistant and the Google Photos smart photo app — have almost no following here.

Several of Google's AI products have not even been added as entries in Baidu Index or WeChat Index.

Google Trends tells a similar story. The screenshots above show what Chinese users search for on Google itself, benchmarked against Google as a whole — in other words, which Google products matter to the Chinese users who can reach the open internet.

YouTube leads, followed by Gmail and Google Play. The newer products draw almost no interest at all. In Google's own search data, both "AlphaGo" and its Chinese nickname, "Alpha Dog," register zero.

Seven years after it left, Google has turned, in the minds of most Chinese users, into an entertainment company.

For Google Itself, Search Still Matters Most

Since it found its business model, Google has been an advertising company. In 2016, 88% of its revenue came from ads — a large share from search keyword ads, plus a fast-growing share from YouTube video ads.

Of Google's $90 billion in revenue for 2016, more than $79.3 billion came from advertising.

To sell more ads, nearly all of Google's free internet products — email, maps and the rest — give users a basic service while feeding data into better-targeted advertising.

YouTube matters too. On every quarterly earnings call, Google CFO Ruth Porat brings up rising YouTube viewership right after Search.

Now that the PC era, when everyone sat down at a home computer to get online, is over, how many people see Google's ads on a phone counts for more and more — and on mobile, YouTube viewership has become a key yardstick, above all in the fight with Facebook over ad money.

But making money from anything other than Search still looks hard.

Google has never disclosed the profitability of a single product, or how much of its ad revenue any one of them brings in. That includes YouTube.

YouTube is now a video site with a billion users worldwide, and its silence on profits is not good news. Big companies usually withhold profit figures for a specific product because the numbers aren't yet impressive enough to show off. The Wall Street Journal and other outlets guess that YouTube may still be losing money.

Newer products such as Google Assistant face the same problem.

Last year, the product Google mentioned most often on its earnings calls, after the search engine and YouTube, was Google Assistant, built around artificial intelligence.

At last May's developer conference in Mountain View, where Google is headquartered, the whole company turned strategy, making AI the foundation of its internet products.

CEO Sundar Pichai said, "Machine learning is an engine that can take us into the future. Google now has more than 100 teams using machine learning, from Street View and voice search to Gmail, and more."

None of it brings in direct revenue for now. None of it helps Google fight off Facebook's challenge to its advertising business.

Its Biggest Businesses Are the Ones You Can Barely Use

Google has six products with more than a billion users each.

The largest, Google Search, holds 93% of the search market. Outside China there are 2.8 billion internet users worldwide, which means 2.6 billion people use Google Search. On the balance sheet, Google's most profitable business is still the advertising that search throws off.

Baidu, which rules China's search market, took in about $9.3 billion from search advertising in 2016. Even a slice of that business would be worth having.

Search, then, is the most commercially valuable part of Google. Whether it can compete with Baidu in China is not entirely up to Google.

On January 12, 2010, Google announced that after being attacked from inside China it would stop accepting content censorship and would move its Simplified Chinese service to google.com.hk in Hong Kong. Check into a Chinese hotel that takes foreign guests since then and you will often find a thoughtful little notice warning you that Google, along with a long list of other overseas internet services, cannot be reached.

Things have plainly not improved since. If Google Search wanted its pre-2010 access back in China, the price would be more than data security.

Other businesses run into a different obstacle here: their business model. Android and the Play Store are the clearest cases.

Every Chinese phone maker now wants app store revenue — delivering users to game companies and taking a cut. Their hardware margins are thin, and Google would find it hard to talk them into handing that revenue over.

As for YouTube, the service Chinese users want most, what draws them to it is content made by a billion users abroad. Moving that in sounds like a censorship disaster in the making.

In the End, the Market Hasn't Gotten Any Better

Last June, Google CEO Sundar Pichai set out his view of China in a public talk:

"I care about being able to serve users in every corner of the world. Google is built for everyone. I want to be in China, serving users."

AlphaGo's trip to China helps Google's China business mainly with its image.

It can advertise Google as a top-tier technology company. It changes nothing about the daily life of a Chinese internet user.

China now has 257 million Android users. Seven years of separation means more than not being able to use Google's services. Phones without Google's underlying services can't run even an entirely uncontroversial app like Yelp — the model Dianping copied in its early days — once you take them abroad, because Yelp calls Google Maps.

Both are called Android, but Chinese Android users are running something else entirely.

Google and the products built on it are not the only things China's 700 million-plus internet users struggle to use. There is also less to see.

In 2012, The New York Times still launched a Chinese-language site. Today the English sites of The New York Times, The Wall Street Journal, Bloomberg, The Economist and The New Yorker all take a certain skill to open.

Instagram and Pinterest, both usable in 2010, are blocked now too.

Lawmaking has tightened in the past few years. The Cybersecurity Law passed at the end of last year sets out extensive requirements for companies providing internet services inside China, including opening source code from companies such as Microsoft, IBM and Intel.

Microsoft recently brought out a version of Windows 10 customized for China. What exactly was customized, it hasn't said.

Some services that had only just launched were shut down — Apple's iTunes Movies store and iBooks Store, for instance.

Last month, new rules published by the Chongqing municipal government made using a VPN without permission an offense: "establishing or using an unauthorized channel to connect to the international internet," subject to penalties.

If Google wants this market, it is a harder job than it was seven years ago.

Cover image from Andreweland@Flickr and Josh Chin@Flickr (banner image)