San Francisco — Google Inc., last week disclosed that it has invested $1 million in a start-up company Comsenz Inc., a Chinese company that provides software and services for online community networks. It is nevertheless a different move by Google to expand its foothold in China.
Reports of Google’s investment funds in Comsenz showed up in Chinese media last year, although the speculation had it that Google was investing roughly $5 million into the Beijing-based company.
That is short of $4 million than the rumors had pointed any investment amount would be, but the move does reaffirm Google’s desire to absorb more market share in the Chinese market.
Google’s investment has been confirmed by Comsenz CEO Dai Zhikang, who revealed that Google is a strategic investor in Comsenz’s Discuz! its BBS’s software.
Comsenz operates Discuz!; one of the largest bulletin board systems in the country. Comsenz provides technical support and software for many Chinese BBSes, blogs and websites, besides Discuz! — It also operates well-know sites such as SupeSite and ECShop.
As BBS’s are still somewhat famous in China, the tactical investment on Google’s part may well have to do with advanced integration with other Google apps later on down the line.
“Google said that the investment took place in July as part of Comsenz’s second round of venture funding for the closely held firm, and it was recently revealed in a regulatory filing.”
Previously, Comsenz has received an undisclosed amount of funding from venture capital firm Sequoia Capital, which holds a stake of more than 10% in the company, with a portion of this being held by former Google director and Sequotia partner Michael Moritz.
Moritz and Sequoia were among the original financial backers of Google, and he gained a board seat with the company in 1999. In March of last year, Google announced that Moritz would not seek re-election to the board in order to focus more attention on his duties at Sequoia.
Dai added that this round of financing will be used mainly for product development, and would not be used for large-scale acquisitions or marketing activities. Dai also stated that the company currently has no timetable for a public listing.
“Google, along with rival U.S. Internet firms Yahoo Inc. and Microsoft Corp., is seeking a stronger foothold in the growing Chinese Internet market.”
As for Google’s American competitors, Yahoo Inc. and Microsoft Inc. already settled in China, and many another companies like News Corp. making their way into the Chinese social networking circuit, Google has been increasingly aggressive in its efforts to grow its presence in the country with the largest web-surfing population in the world.
The news follows a report that Google is gearing up to launch a joint music download venture in China, mainly to take on Chinese search engine Baidu.com, which has been beating Google by offering free music. Baidu has launched its own IM efforts in the race to dominate the Chinese market.
Separately, Google revealed it acquired Peakstream, a company that makes it easier to run applications on multiprocessor systems and thus should help Google boost its internal server architecture, for about $20.3 million.