Google, an underdog in Asia, lays plans for Taiwan data center

Taiwan gets Internet traffic easily from the United States. I sits at the ends of undersea cables that extend directly from North America before branching off to other parts of Asia.

Google dominates Internet search engines by such a wide margin in the United States that it’s a verb as well as the corporate name of its Silicon Valley-based creator.

But in China, Google vies with the local, government-approved search engine Baidu – which means 100 degrees – and lags South Korea’s local brand Naver. It competes head on against fellow American company Yahoo for searches in Taiwan, splitting traffic roughly 50-50. Yahoo has also held a historic grip on Japan.

So this week, the 14-year-old Google announced that by the end of next year, it would open a data center in Taiwan to improve search speeds and reliability around the region.

Google has already started building data centers in Hong Kong and Singapore. But the larger one in Taiwan comes with government incentives and will boast a specific geographic advantage. That is, Taiwan gets Net traffic easily from the United States, home to Google and the source of numerous Internet search results, as it sits at the ends of undersea cables that extend directly here from North America before branching off to other parts of Asia.

Google will spend a combined $700 million on the three centers, which generally house computers and storage systems that help speed connections and keep them secure.

“More new Internet users are coming online everyday here in Asia than anywhere else in the world,” Google’s Asia Pacific President Daniel Alegre said at a groundbreaking ceremony on Tuesday at the coastal facility in Taiwan. “That is why we are building data centers in Asia – to ensure that our users here have the fastest, most reliable access possible to all of our services, so they can continue putting them to work.”

Google’s Taiwan data center will speed up searches particularly in China, which is just 160 kilometers (100 miles) away but has sought to censor Web searches. Baidu now controls about 75 percent of the searches in China.

“That’s a key, to serve China,” says Marvin Ma, software and services analyst with the market research firm IDC in Taipei. “China will notice a clear improvement. And this way Google can avoid the censorship problem.”

In 2010, Google shut down its locally based Chinese search engine after a dispute with the communist government over censorship and cyber-attacks, a row that prompted harsh words from Secretary of State Hillary Clinton.

Google won’t give market shares for Asia or estimate the overall number of users in the region. In South Korea, Naver still handles about two-thirds of the Internet searches, analysts estimate. But two years ago, Google and Yahoo signed a search-engine technology deal that has muffled the rivalry in Japan.

Google is also catching up in Taiwan as the ever popular Yahoo retrenches, with reports of layoffs in the pipeline, says Jamie Lin, founding partner with Taipei-based tech investor appWorks Ventures. “If they don’t make any mistakes, Google is going to be the dominant player in a couple of years,” he says.