Is Google’s Mobile Loss in China Kai-fu Lee’s Gain?

Former head of Google China, Kai-fu Lee, insists— insists —that he is not happy that Google imploded its business in China. “Seeing the work that I put in, how could I be happy to see that?” he says. In fact, in a press release all about his incubator's companies being built on top of Android he doesn’t use the G-word once. “Given the pull out, we’ll accept the situation and do our best,” he says humbly. Yeah, accept the situation like a fox. As Lee begins to open up more about the types of companies being created at his incubator, Innovation Works , there’s a consistent theme—Android. Whether it’s address books, music programs, video games, maps, eCommerce marketplaces or e-readers, many of Lee’s companies are hoping to take advantage of the good things about Android—namely that it’s a free, robust operating system—but customize the core smartphone applications in a way that Google won’t or can’t. It’s interesting that I had a conversation with Lee about this topic right about the time Google CEO Eric Schmidt was delivering a keynote touting that more than 200,000 Android-powered smartphones are activated daily, going beyond just the smartphone wielding “elite.” Lee would agree with everything his former boss said. It’s just that Google isn’t well positioned to make money off the apps and services in the world’s largest market. Oops.