UPDATE: Google: New China Management Follows Global Management Structure

By replacing its outgoing China head with two executives, Google Inc. (GOOG) is bringing its China team in line with its global management structure, with separate managers for engineering and sales operations, Daniel Alegre, vice president of Google's Asia-Pacific sales and operations, said Monday.

"We are creating a management structure (in China) that is similar to what we have done in other countries around the world, and it has worked very well," Alegre said at a news briefing.

Google announced the resignation of Kai-Fu Lee, head of its Greater China operations, on Thursday.

Lee is being replaced by two executives. Boon-Lock Yeo, previously director of Google's Shanghai engineering office, will take over engineering responsibilities for the Greater China region. John Liu, who heads Google's sales team in Greater China, will become vice president of sales and operations, assuming Lee's business and operational responsibilities.

Previously, Google didn't split the management in China because it didn't have a large enough team in the country, Alegre said.

"When Lee Kai-Fu joined the company, we were only a handful of people, so we needed someone to be able to represent all of Google in China," he said.

Lee joined Google in 2005 from Microsoft Corp., which sued Google over the move. The case has since been settled between the two companies.

During Lee's tenure, Google grew its market share considerably, from 13% in 2005 to 29% at the end of June this year, according to research firm Analysys International.

But that growth mostly came at the expense of small players such as Yahoo China, a unit of Hangzhou-based Alibaba Group. Google hasn't succeeded in taking significant market share from local search leader Baidu Inc. (BIDU). Over the same period, Baidu grew its share of the market from 33% to 61%, according to Analysys.

At the news briefing Monday, Liu said Google will work with regulators to understand new regulations that require online music sites to seek approval from censors for all foreign songs they distribute on the Internet. Google will continue to offer music in China as it reviews the impact from new rules governing online music sites, he said.

Liu joined Google last year, after six years as China president for South Korea's SK Telecom Co. Yeo has been at Google since 2007. Before joining Google, he was the general manager of Intel Asia-Pacific R&D Ltd., working on Intel's research and development efforts in China.

-By Aaron Back, Dow Jones Newswires; (8610) 6588-5848; [e-mail]