Analyst figures show cost of Google's China policy

Google's problems in China have given rivals such as Baidu a free rein

Google's tussles with the Chinese government have cut its share of the global advertising search market to below 70 per cent, according to new data from Strategic Analytics.

The overall advertising market grew by 2.7 per cent globally in the past quarter to $6.2bn (£4bn), according to the analyst firm. However, Google's share fell from 71.1 to 69.7 per cent.

"Google’s dispute with the Chinese government, and subsequent withdrawal from the Chinese market, has given Baidu the advantage of unrivalled growth in the world's largest internet market by users," Jia Wu, an analyst at Strategic Analytics, told V3.co.uk.

Baidu is China's most popular search engine, and was the biggest winner during the quarter with revenue growth of 1.4 per cent.

The company is now the fourth largest player in the search market, less than one percentage point behind Microsoft's Bing. Google's share dropped by 1.4 per cent.

"Google is growing, but not as fast as Microsoft and Baidu," said Wu. "The Chinese market is also growing much faster than the rest of the world, and international firms have not been able to compete against local operators."

Wu explained that Google and Baidu have strong positions in China, but that the next three largest players are local companies that operate in the country's regions.

Yahoo's market share fell by 0.3 per cent in the past quarter, despite major investments. Otherwise, the market remained largely static.