Google Desperately Trying to Gain Ground in China

[Garret]

Google hasn't been shy about its ambitions in China: It desperately wants to own the market. In fact, just this week Eric Schmidt was in Beijing, trying to drum up interest in a redesign of the local Chinese web property.

Meanwhile, Google has made little progress. It's been creamed by Baidu (in terms of traffic), and the company is scrambling to catch up. But if Alibaba.com is really looking for somebody to buy the stake currently owned by Yahoo (as reported by Reuters), Google would likely be the perfect fit.

"The Chinese market is strategically important for Google, and Alibaba would be a valuable partner. Google also has plenty of cash and could write a check for it," says Laura Martin, an analyst with Soleil-Media Metrics.

Some background: Yahoo agreed to buy a 40 percent stake of Chinese web company Alibaba.com for $1 billion in August 2005. Alibaba.com CEO Jack Ma, had previously vowed to squash Yahoo and Google "for fun."