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 (GOOG, GOOGL)

Kai-Fu Lee

Kai-Fu Lee, a longtime technology executive who previously served as president of Google China, has helped US companies such as Microsoft and Google operate in China for years.
As Google considers a return to China, he says the search business there is too mature and Google should give up on it.
He says 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 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 the country. Google's management chose to leave.

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 may bow to China's censorship demands has drawn criticism from human-rights groups, US politicians, and even some of the company's 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.

Kai-Fu Lee

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

Lee declined to say whether he thought 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 might not want to reenter 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 eight years old and Google had 9% market share, so we had something to work with and a brand name."

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

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

"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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