Russians attempt to topple Google in Vietnam

May 15, 2013 by Chris Brummitt
A Vietnamese man uses a laptop to go online by a 3G device inserted into a USB pot at a cafe in Ha Noi, Viet Nam on Wednesday, May 14, 2013. Close to a third of Vietnam's 90 million people are online and men and women browsing phones and tablets are ubiquitous in the cafes of its towns and cities. The country's potential for growth, young population and good Internet infrastructure have made it an attractive destination for regional and international investors and startups in content provision, e-payment and other services. (AP Photo/Na Son Nguyen).

Vietnam's booming Internet scene is littered with failed startups that tried to take on Google and other entrenched U.S web companies. That's not deterring a newly launched Russian-Vietnamese outfit which believes it can unseat the American search engine in this fast-growing Asian market and also contend with a jittery, authoritarian government seeking to clamp down on freedom of expression online.

Like Google rivals elsewhere, Coc Coc, or "Knock Knock" in English, believes the ubiquitous doesn't get the nuances of the local language. It says its algorithms make for a better, quicker search in Vietnamese, while its local knowledge means the information served will be more relevant—and hence more valuable.

Coc Coc also flags another possible vulnerability: Google has no office or staff in Vietnam. The company, whose code of conduct includes the phrase "Don't be evil", is concerned about the liability it faces over content hosted on its servers and having to cooperate with censorship requests by Vietnam's authoritarian, one-party government.

Unlike other past hopefuls, Coc Coc is not short of cash.

The company has so far spent $10 million, hired 300 staff—including 30 foreigners, mostly Russians—and spread itself out over four floors of a downtown office block in the Vietnamese capital. According to Coc Coc's founders, its investors have $100 million over the next five years to try and get a chunk of the 97 percent of Vietnamese web surfers who currently use Google to switch. They declined to name the investors.

"When I came here, I had some understanding why Vietnam was a good market to beat Google," said Mikhail Kostin, the company's chief search expert and like others in Coc Coc, a veteran at Russia's largest , Mail.Ru. "But after living here for one year, I understand the language and market much more deeply. I'm sure it's right."

Close to a third of Vietnam's 90 million people are online and men and women browsing phones and tablets are a common sight in the cafes of its towns and cities. The country's potential for growth, its young population and good Internet infrastructure have made it an attractive destination for regional and international investors and startups in online content, e-payment and other services.

Companies, however, have to factor in legal and political uncertainties. Shaken by an explosion in online dissent, the government is drafting laws that would tighten freedom of expression on the Internet and possibly force companies such as Google to keep their servers inside the country. It routinely blocks and filters sensitive sites, sentences bloggers to long jail terms and is alleged to be involved in hacking attacks on websites critical of the ruling party.

A Russian expert walks at the reception of a new launched Russian- Vietnamese web company which is developing its search engine, Coc Coc to compete with Google for the local marrket in Ha Noi, Viet Nam on Wednesday, May 14, 2013. The company has so far spent $10 million, hired 300 staff -- included 30 foreigners, mostly Russians and according to founders, its investors have $100 million over the next five years to try and get a chunk of the 97 percent of Vietnamese web surfers who currently use Google to switch. (AP Photo/Na Son Nguyen).

Patrick Sharbaugh, a lecturer in Asian Internet studies at RMIT International University Vietnam in Ho Chi Minh City, wondered whether Coc Coc might be more willing to censor search results on behalf of the government, something Chinese search engine Baidu does for Beijing. While not as close as they once were, Russia and Vietnam have a special relationship because of their shared ideological history.

"If a player like Coc Coc came in, or Baidu, and said 'hey were are perfectly happy to filter whatever you want us to filter' and in return they would get preferential treatment from the government, that could put Google in very tough spot," he said.

But there is so far no sign that Coc Coc is prepared to play the role of Hanoi's favorite Internet son. Test searches for politically sensitive terms such as Viet Tan, the overseas pro-democracy group that Hanoi regards as terroristic, were comparable with Google's and didn't hint at censorship.

Yet the sensitivities surrounding the topic were apparent when one of Coc Coc's three cofounders, Nguyen Duc Ngoc, was asked whether the company would censor searches if asked.

The interface of Coc Coc, the search engine of a new launched Russian- Vietnamese web company which is developing its Coc Coc to compete with Google for the local marrket in Ha Noi, Viet Nam Wednesday, May 14, 2013. The company has so far spent $10 million, hired 300 staff - included 30 foreigners, mostly Russians and according to founders, its investors have $100 million over the next five years to try and get a chunk of the 97 percent of Vietnamese web surfers who currently use Google to switch. (AP Photo/Na Son Nguyen).

After a minute of silence punctuated by an occasional "um," Ngoc came up with an example of a search request that might not be honored: someone tapping in "Ho Chi Minh", the founder of Vietnam's Communist Party and the focus of a state-manicured personality cult, and "is a dog."

"A lot of queries like that are made by politically-interested people," he said. "Average people are caring about more simple things like how can I find information about my life. In some cases, if they really want to go for that kind of information, we can offer them alternative search engines," he said, without elaborating.

In a statement, Google said it welcomed the competition Coc Coc represented and it hoped to bring more products and services to Vietnam in the future. It said that for the moment it had nothing to announce regarding the opening of an office in the country. Separately, it announced last week that it was launching AdSense, its popular advertising network, in Vietnam.

A young Vietnamese girl reads a book while other youngsters use smart phones to go online at a cafe in Ha Noi, Viet Nam Wednesday, May 14, 2013. Close to a third of Vietnam's 90 million people are online and men and women browsing phones and tablets are ubiquitous in the cafes of its towns and cities. The country's potential for growth, young population and good Internet infrastructure have made it an attractive destination for regional and international investors and startups in content provision, e-payment and other services. (AP Photo/Na Son Nguyen).

Google and Baidu were fighting over the search market in China until 2010, when Google shifted its search engine to Hong Kong after a reputation-bruising dispute with Beijing over censorship. Baidu is now the dominant search engine in China. Baidu has a language laboratory in Singapore and is believed to be looking to expand into other Asia markets, but it is not involved in the search market in Vietnam. Anti-Beijing sentiment has left Chinese facing consumer boycotts in Vietnam that make it hard to launch products.

Ngoc's parents lived in Russia when he was growing up, and like the other two Vietnamese founders he studied in Moscow. The company's ethos reflects both countries, and in its relaxed office space something of the California-style tech : cutoff jeans, laptops on laps, fish tanks, and as per Vietnamese culture, shoes off before you go in.

Google dominates search across the globe, but there are a handful of markets in eastern Europe and Asia where it trails local companies, such as Yandex in Russia, Baidu in China and Naver in South Korea. In most cases, the local companies were entrenched before Google entered. Capturing existing market share from the American giant is a far more difficult task.

"I'm skeptical they can do it, but they are spending a ridiculous amount of money," said Minh Do, an editor at Tech Asia, an online publication that reports on the tech industry. "Vietnam as a country is a pretty hard place to do business unless you are here. There are a few things that Google can't keep up on."

Coc Coc's hopes lie in the distinctiveness of Vietnamese, which it believes Google doesn't do such a good job with because it hasn't invested in understanding its grammar and syntax. Search engines that can recognize nuanced and complex sentences can deliver better and potentially more valuable search results.

Coc Coc believes its large office means it is better placed for marketing, cutting deals with content providers and making its search results more localized. Its camera crews are already filming and photographing streets and logging shops, cafes and businesses—data that will makes results far richer. Google can't deploy its 'street view' vehicles in the country as it has done elsewhere in Asia.

" is a foreign company, and they are not here," said Ngoc. "We can serve the interests of the local market better."

Explore further: China's Baidu reports slower profit growth (Update)

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