Google Goes to China, Making Play for Talent and Attention

By Liza Lin in Wuzhen, China and Jack Nicas in San Francisco Features Dow Jones Newswires

A friendly game of Go in the picturesque city of Wuzhen this week has given Google an opening to return to China's good graces, seven years after it left the country over government censorship of its namesake search engine and hacks of its Gmail service.

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Few companies can match Google for its global reach, with billions of people hooked on its products. Yet China manages without it, leaving a gaping hole in the global map for the Silicon Valley giant and its parent, Alphabet Inc., as they expand into driverless cars, cloud-computing products and other technologies made possible by rapid advances in artificial intelligence, or AI.

On the surface, the Google entourage was here for a three-game Go rematch between its AlphaGo computer program and Ke Jie, China's 19-year-old world champion. After two matches, AlphaGo is up 2-0, with a final game set for Saturday.

Beyond the contest, the event allowed Google to be seen in a country that is significant for its long-term business prospects, and to forge relationships with Chinese government officials who could play pivotal roles in that respect. Wuzhen is also the venue for a high-profile internet conference convened annually by the Cyberspace Administration of China.

Near-term, the AlphaGo event was a chance for Google to raise its profile with China's young engineering talent, who are much in demand as rivals such as Amazon.com Inc., Facebook Inc. and Chinese internet firm Baidu Inc. ramp up their ambitions in products dependent on advanced AI technology, such as facial recognition.

Two of Google's top AI executives in its cloud unit are Chinese women: Fei-Fei Li and Jia Li, the former head of research at messaging firm Snap Inc.

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AI talent in China has "significantly increased in quality and number of top talents," said Ms. Jia, who attended the Wuzhen event. She said Google is looking to hire AI engineers in China to add to the more than 500 staff in Beijing and Shanghai. Although its main products are blocked, Google still runs an online advertising business in mainland China, helping Chinese and international firms to market their business overseas and on some local platforms.

Hiring Chinese engineers will likely be easier than winning over the country's regulators and consumers, given lingering bitterness over Google's 2010 departure, when Google co-founder Sergey Brin became an outspoken critic of China's government.

In a sign of the importance Google placed on the event, Alphabet Chairman Eric Schmidt made his first public China appearance here since 2015, joined by star Google scientists including Demis Hassabis and Jeff Dean.

Google worked with the provincial government in the Wuzhen region to stage the event, but no Chinese internet services live-streamed the event. People familiar with the situation said streaming plans were dropped at the last minute for reasons that weren't clear.

Google remains interested in expanding its presence in China, but it recognizes the challenges and is moving slowly, according to a person familiar with the company's thinking. Google recently introduced its Translate app into China and is working to bring in more Android apps over the next year, this person said.

There are many business reasons to return. China is a dark spot for Google Cloud, its business of running companies' systems and data on its computers. In a regulatory filing, Snap Inc. noted that it has "very limited access to the China market" in part because "access to Google, which currently powers our infrastructure, is restricted in China."

In hardware, Google recently launched new flagship smartphones and a smart talking speaker. But the key selling points of those devices are their Google services, such as Google's virtual assistant, which are blocked in China, and these products aren't available there.

Self-driving cars also face obstacles because China only allows local companies to collect high-definition map data--citing national-security reasons--shutting Alphabet and other U.S. firms out of collecting crucial data.

Government restrictions aside, a potentially greater challenge is the aggressive expansion by Chinese competitors Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Baidu since Google left the country.

"The Chinese software landscape has changed significantly since Google's departure," a former Google China executive said. "Re-entry is not simply a matter of government approval, but winning over users."

Chen Chao, a 30-year-old project manager at a Chinese technology startup, said he was impressed by Google's innovations after attending the Go event. Yet the former Gmail and Google search user said he would unlikely switch back to Google products even if they were available, having found Chinese services that meet his needs.

"When Google was shut out from China," Mr. Chen said, "a lot of Chinese internet companies came in to fill the hole they left."

Write to Liza Lin at Liza.Lin@wsj.com and Jack Nicas at jack.nicas@wsj.com

(END) Dow Jones Newswires

May 25, 2017 05:39 ET (09:39 GMT)