Head of Google in China steps down

Dr. Kai-Fu Lee, the head of Google (GOOG) in China, said he is leaving to start a venture firm. A marketing executive at the search engine's operation in the world's most populous country will take over for an interim period.

Lee is popular among the tech community in China, but he may be departing because, by several critical measurements, Google is a failure on the mainland. According to the Financial Times, "The company's market share dropped back to below 30 per cent in the second quarter, less than half that of Baidu, according to Analysys, a local internet and media research house." Lee has been with Google since 2005 and the firm has made very little progress against its rival.

It may not matter who runs Google in China. Baidu (BIDU) not only has a market share lead but many analysts believe that the government has set up obstacles to the expansion of the American company. Baidu's home-grown search technology is also seen as better tailored to the local market and language.

Despite Google's tremendous resources, after years of running well behind Baidu, the world's largest search firm may not be able to make gains no matter who is put in charge.

Douglas A. McIntyre is an editor of Google Financial News.

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