The guy who used to head up Google China says he knows the key to the company's success if it were to return - and it's not search

Greg Sandoval/Business Insider

Kai-Fu Lee, Google China's former president, spoke on a panel at the Artificial Intelligence 2018 Conference.

• Kai-Fu Lee, a longtime technology exec and the former president of Google China, has helped US companies such as Microsoft and Google operate in China for years.
• As for a possible return to China by Google, he said the search business there is too mature and Google should just give up on it there.
• He said the situation with Waymo, however, is a different story...

If we're talking exclusively about Google's financial interests, then management's decision to pull out of China in 2010 was clearly a mistake, and Kai-Fu Lee, the former president of Google's operations in China, begrudgingly acknowledges that.

"Had they stayed and continued to operate legally they would be in a much better position to launch products," Lee told reporters on Thursday. But the longtime tech executive and investor quickly noted that Google didn't make the decision to leave China with an eye on its pocketbook.

The company was forced to choose between complying with a demand by China's government to censor search results, or stop operating in that country. Google's management chose the latter.

More recently, however, Google appears to have experienced a change of heart, and managers recently acknowledged they're considering a return to China. According to reports, Google is eager enough to return to China that it has already built a censored search engine.

The revelation that Google might bow to China's censorship demands has drawn criticism from human rights groups, US politicians, and even some of the company's own employees. Lee, who worked for Google China for four years before leaving in 2009, made his comments following a panel discussion he participated in at the Artificial Intelligence 2018 Conference in San Francisco.

Photo by Doug Cody, courtesy of O'Reilly Media

Kai-Fu Lee, Google China's former president, addresses the audience at the Artificial Intelligence 2018 Conference.

'In search, it's just not meant to be'

Lee declined to say whether he believes the stand Google took nine years ago for free speech was the right one. He did, however, have no problem listing the many competitive reasons Google may not want to re-enter China.

For starters, the search business there is packed with homegrown competitors, whom Lee earlier likened to entrepreneurial "gladiators." According to Lee, Google shouldn't even bother facing off against this lot because the odds are all with the home team.

"When you're in a market that is already 20 years old and mature like search, to go in now with a zero-market share and build it up is such an uphill struggle," Lee said. "When I went into the search market it was maybe 8-years old and Google had 9% market share, so we had something to work with and a brand name."

Lee said that prior to Google's departure from China, he and his staff had carved out a 24% share of the market. He's doubtful Google could ever again come close to that.

The search giant, however, would stand a better chance of finding success if it moved into a segment that wasn't as mature, say, for example, autonomous vehicles, Lee said.

"In search, it's just not meant to be," Lee said. "If Google wants to do anything, they should enter an area with a new product in which there are no entrenched players, nor are there clear user expectations and biases. For example if Waymo could land in China, Google would have such advantages. A two-year lead and also if there's proper deployment, it could be a runaway success."

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