Conference Call Highlights: Google on its China Activities (GOOG)

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 |  About: Alphabet Inc. (GOOG)
by: SA Editors

From Google's (NASDAQ:GOOG) Q1 2006 earnings conference call:

Eric Schmidt - Chairman of the Executive Committee, CEO

All of us, the majority of us, were recently in China, where we announced, among other things, a launch of our major R&D center in Beijing and a new Chinese name for all of our Chinese properties, and we expect lots of good news there shortly.

Mark Mahaney - Citigroup

.....I would like to ask about one market where you may not be gaining share, and that’s the China market. Do you think you’re gaining share in queries there? I guess the third-party data probably doesn’t indicate that. I know it has been a major emphasis of yours recently. Are there new initiatives we should look for out of that market?

Eric Schmidt - Chairman of the Executive Committee, CEO

Having just returned from China, I think the market is up for grabs. Most of the surveys indicate that we are not in the number one position, we’re in the number two position, and roughly holding and/or maybe gaining share in a small amount. Part of the reason that we’re investing so heavily in China is because we think that the now 110 million people online in China, and soon to be many hundreds more than in the United States, will ultimately be big consumers of Google information.

In order to do that, we felt that the most expeditious thing is to, in fact, have an R&D center; in addition, obviously, to having a presence in the country and working on connectivity and those sorts of things. The quality of the technical talent that’s available in China is just phenomenal.

So in the short term, you’ll see the formation of the R&D center, which we have announced. Those engineers will be improving query performance, services and in fact new products for the Chinese market. We believe that the sum of those will materially change the dynamics in the Chinese market.