Wednesday, April 12, 2006

Robin Li: Google Will Be Today's Yahoo In Five Years

China Business News(CBN) interview Baidu's CEO Robin Li on Tuesday

CBN: Google's CEO Eric Schmidt is visiting China. One of his major activities will be the participation in the ceremony of the formal rollout of operations in China. What's your view on Google's entry into the Chinese market? And do you think Schmidt will play a major role in their China operations?

Li: I think the history of multinationals in the Chinese internet area basically proved what I have said before. That is the current situation of Yahoo.China. You can have the imagination of what Google.China will be alike. They have come through the same road, only slower.

Actually when you look at a management team, the CEOs of the multinationals can't spend long period of time in China. The internet is moving at lightning speed. How to adapt to the fast changing environment with new strategies and innovative products is a big challenge.

CBN: But the fact is that they are already here and possibly even to grab some of Baidu's top talents for their need. Then the question is how can you keep the stability of your team?

Li: From the cultural point of view, internet business in China basically built on founders' culture. What kind of founder determines the kind of company. That in turn, dertermines the core of the team and their styles. Therefore, if the founders stay active, the companies usually are doing well. For those their founders have left, they are usually in some trouble.

On the other hand, I have to admit that the cost of attaining talents are going up. But Baidu is not much like before. A few years back, we paid employees perhaps very low salaries but more stock options. Now we are paying them more cash. More importantly, Baidu provides a better growth environment for many people.

CBN: Then, you think Baidu has absolute lead?

Li: Of course not. Every company has strength as well as weakness. Regarding financials, Baidu is far from the top positions on the global ranks. We are still in an budding industry with relative short history. So, capital is not Baidu's strength.

Besides that, on the development front, we are only focus on the Chinese languge market. The maturity of the market is clearly not our advantage either. The search market in China is very special in the world. What special about it? Everywhere in the world, search is a major part of the internet market. In the US, it is about $6 billion. Though China is the second largest internet market, the search market scale is still very small. Moneytizing is not as good as online gaming. Currently, search market is only about 1/8 as big as online gaming market in China. So, the search market in China is very much immature. The majority of businesses do not know how to use search marketing for advertising campaign. All these are the problems facing us.


CBN: Under this situation, do you feel big pressure from investors?

Li: The situation is also meaning that the potential of search market is huge, not much a pressure.

Before and after Baidu's going public, investors have not done anything practically different. Our strategies are pretty much the same too.

For longer term, the investors' benefit aligns very well with my own, being a founder and manger. We all hope for higher profit. Common investors usually are looking at shorter term. They'd like to see next quarter's earnings be good. For Baidu to be succed in becoming respected high tech company in the world, we need to strike a balance between long term investment and short term profitability.

Currently we have not met any pressure from investors to do things we'd like not to do. We have firm control of decision makings.

Translated from Chinese Article

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