China Tech Stories

Baidu Continues Dominance in Search Market in China

2008-10-22T22:03:00.000-07:00

Third quarter search market shares in China: Baidu 63.4%, Google 27.8%.

Image from Analysys.com

Leaked: Unicom Will Introduce iPhones to China

2008-09-23T18:22:00.000-07:00

Sept 24, 2008, at today's opening ceremony of Chinese Internet Conference, China Unicom who has already won 3G licence, demonstrated wCDMA network in Nanjing for the first time.

Following the spin of it's CDMA network to China Telecom, the wCDMA development will likely be sped up and could be in operation as early as the end of this year.

In China Unicom's leaked brochure, 3G iphone is listed as one of the wCDMA handset. Sources indicate that China Unicom is in further discussion to bring 3G iphone to the Chinese market by the end of the year.

linked Chinese article

Executives Shapeup at Chinese Internet Companies

2008-08-18T11:18:00.000-07:00

Aug 18, Netease Tech News reports, exit turmoil is hitting many Chinese internet companies.

Just last two day, we have seen the resignation of Kong Zhong's CEO Zhou Yunfan, Focus Media's COO Chen right after their quarterly financial report. TOM Group's Tang Meijuan resigned from non-executive director soon after resigned from the CEO post. Coupled with previously outgoing Chairman of the Board of Sina, Duan Yongji, Shanda's president Tang Jun, Hurray's president Wang ShaoJian, The9's CFO Li Qiaoen, and Focus Media' CEO Xu Maodong , Dozens of executives from Chinese internet service business had quit. It has set off a firestorm of executive turmoils in the internet sector.

SP becomes the diseastrous area

On the list, we can easily find out that the SP business was hit the hardest. Network executives, including Zhou Yunfan, Tang Meijuan, Wang ShaoJian, and Xu Maodong are the confirmed heavyweights.

After going through a major nationwide rectification, many domestic businesses SPs have suffered. The company's financial performances are also girating downward with new lows being set one after the other. The existing businesses are in downturns without significant pickup in new strategic initiatives.

During the second quarter, Kong Zhong just announced it's fifth consecutive loss. Though Zhou resigned due to "personal reasons", the poor performance certainly did not help.

Tom Group also annouced it's huge loss of over 547 million Hong Kong dollars from the second quarter due to writedowns from wireless operations. Tom has also lost 297 millon Hong Kong dollars during 2007 due the the tightening from the China Mobile group. That's the reason that led analysts believed why Ms. Tang had departed.

The marriage between Hurray and Enlight Media certainly attracted the attention from domestic counterparts. However, differences in strategic directions soon led to "breakup". Though CEO Wang Qingdai denied the speculation, Wang Shaojian is believed to join a very strong company soon.

Since the CCTV "spam gate"outcry, the Focus Wireless has gone down hill. Over two thirds of employees were let go. Focus Media's vice president Ji Hai-rong has revealed that the division originally had about 300 people. Now many executives including CEO Xu Maodong hadleft.

The most celebrated departure- a servant with emperor's wage

Separation is not all depressing. On April 15, Tang Jun resigned as president of Shanda, then joined the Newhuadu Group with sky high price tag of 1 billion yuan. He is undoubtedly the most celebrated to depart in the first half of the year.

Tang Jun has a perfect professional managerial career in his past. In 2004, Tangjun gained "honorary president for life" from Microsoft before joined as president of Shanda, where he succeeded in achieving China's top servant on emperor's wage.

Now jumping from internet to traditional real estate, luck may not run with him this time around. However, in his interview with NeteaseTechnews "CEO face CEO" column, Tang confidently said that, "A few years later, I will tell you that, after three years serving Newhuadu, I still do not understand real estate. But I can run this company very well".

Contrast to those who have quitely left, Tang certainly has a shining ring on his head.

The largest mass exodus - Alibaba suffers high level shakeup

Strictly speaking, the shakeup has started during the "silent night" in 2007. It has since continued to struck the company until the first half of this year.

None of the four platforms under the Alibaba group has escaped. One after the other, COO Qi Li, CTO Wu Jiong, Sun Tongyu and senior VP Li Xuhui all departed for studying and resting overseas by June 1.

Group Sr. VP and president of Yahoo.China, Zeng Ming will become Chief Strategist. Group Sr. VP and president of Alipay will take over Taobao. Jin Jianhang will be president of Yahoo.China. Shao Xiaofeng, VP of Taobao will take over Alipay.

The high level shakeups has involved eight top guns under Alibaba's CEO Ma Yun. The size of the scale, the number of executives involved, as well as the magnitude of the reorganization are certainly historic in the internet industry and may remain so for years to come.

Who will be the next to go

Besides the change at the large internet companies, it is also noticeable at the companies that have yet to go public. Aug. 18, head of Qihoo's 360 business, Fu Sheng resigned. Founder Zhou Hongyi took over himself. Jul. 10, COO of China Healthmedia resigned after the company received cash injection from Focus Media. In June, former Yahoo.China ceo Tian Jian resigned from BONO only a few months at the job. Chinabyte's COO also left in May.

Others such as head of Tom's Eachnet are also in shaking position.

List of resigned sr. executives during 2008:

Chairman of the Board of Sina: Duan Yongji

President of Shanda Interactive: Tang Jun

President of Hurray: Wang ShaoJian

CEO of Kong Zhong: Zhou Yunfan

COO of Focus Media: Chen Chongrong

Non-executive director of TOM Group: Tang Meijuan

CFO of The9: Li Qiaoen

CEO of Focus Wireless: Xu Maodong

General manager of the Qihoo.360: Fu Sheng

President of Taobao: Sun Tongyu

Alibaba Group COO: Qi Li

Alibaba Group CTO: Wujiong

Alibaba Group senior vice president: Li Xu

COO of China Healthmedia: Chao Liming

General Manager of BONO: Tianjian

COO of Chinabyte: Wang Zheng

Sohu sees tremendous Olympic internet traffic

2008-08-16T15:12:00.000-07:00

Aug 15, report from Beijing morning news reporter Zhang Liming indicates Sohu's exclusive Olympic channel is seeing tremendous traffic.

A few days after beginning of the Beijing Olympic Games, Sohu's internet traffic is in rapid record setting pace.

In the morning hour 10 to 11 am, Sohu's visiting traffic hit a milestone with 100 million visits in that one hour period. It established a new historic record for a Chinese website.

During the 5 minutes after Chen Xiexia won the first Gold medal for China, there were 3 million hits from Sohu's Olympic site which also set a new world record for major sports internet broadcasting. By Aug 11, Sohu has already seen 15 times more traffic than that before the games started.

Sohu's traffic is far ahead of it's major internet rivals in China. According to survey from internet data center DCCI, as high as 52.7% of visitors are "very satisfied" with Sohu's coverage on the opening ceremony.

China Mobile Negotiating With Apple For iPhone

2008-08-15T11:52:00.000-07:00

On Friday, Aug 15, 2008, the CEO of China Mobile, Wan Jianzhou said in Hong Kong, that China Mobile was still in negotiation with Apple Inc from US.

He said due to confidential agreement, no details of the negotiation can be revealed at this time and there is no time has been set when will the super hot iPhone will be introduced to China.

According to sources, the iPhones are already very popular in China even without official launch in the country. Some 400,000 first generation of the phones are in use. The new 3G iPhones have also been smuggled in the country recently selling at $1,200 for 8G models and upto $1,400 for the 16G models.

Baidu News Zooms In On Olympic Games

2008-08-03T15:26:00.000-07:00

With the Olympics starting in days, Baidu has modified the news section highlighting the Beijing Olympic Games.

The news section now has a special area in the upper left for Olympics coverage. There is also another section with streaming news coverage of the Games.

In a separate news, Baidu has acquired the "top search talent" of Japan from Yahoo.Japan which has been losing talents after the failed Microsoft takeover bid.

The Giant is stumping into the online gaming market

2008-03-19T20:37:00.000-07:00

Giant Interactive is rolling out it's next big hit, the Giant Online rapidly.

With the public beta expected in only a few more days, Giant's CEO, Shi Yuzhu is again demonstrating his superior marketing skills.

He has been all over Chinese media making bold claims that the Giant can score 90 points while the WOW only can score 60 points. That has successfully forced Blizzard's vice president, Frank Pearce to take the bait and said that he wanted to play Giant to see how can it be so good.

He made similar claims when ZT online was rolling out. People laughed at him. Shi had the laugh at the end and ZT becomes a cash machine for Giant Interactive.

Instead of playing the sexual appeal of online games under the cover like other Chinese game operators, Shi is openly recruiting beautiful girls to play Giant Online and even get paid for playing. He claimed that Giant Online will have the most female players in China.

So far, his strategy appears working well.

On Baidu's game search ranking, Giant has jumped from 49 to 11 in just two week's time.

On the popular game download site, 17173.com, Giant ranked 21 monthly, 15 weekly, and reached 7th daily today.

Shi is a very special CEO, not because his famous up and downs, but because he's not working in a place where every other CEO sits in. He works more like a super powered customer service rep. He plays and befriend with the players who have the many complains. He then demands almost immediate fix on those problems from the responsive party inside his company, sometimes even late in the night.

Unlike many other popular Chinese games, which focus on glorifying China for it's strong past, Giant Online is themed as "future" with a scheme similar to that of "back to future". It provides players a chance to build a superpower "China" with modern war fare so that Chinese could wash away their shame of recent history of being overpowered by the western countries as well as neighboring Japan.

Unlike other games featuring the super heroes, the Giant Online empowers the teams. The game intends to be the "myspace" of online games with many communities are being built already. There are a dozen different professions and many different activities spanning from hard battle to easy life like fishing, or dancing.

With the Olympic games close in, the nationalism is running high in China. Giant Online will likely splash into the scene and could even smash the landscape of online gaming in China.

With one kind of a CEO and one kind of a game, It's remain to be seen only how long it takes for the "most expected" game to become the most popular game in China.

Sad Day for Baidu

2007-12-30T14:28:00.000-08:00

Baidu's CFO Shawn Wang died in China's Hainan Island in a diving accident on Thursday.

Under his leadership, Baidu has gained international fame for the successful IPO on Nasdaq and later reached market cap over $10 billion dollars.

Baidu has also gained dominance in the Chinese search market with over 70% market share, withstanding Google's constant but unsuccessful onslaugts in the last few years.

He will be missed by many at Baidu during a busy time when Baidu just started it's international expansion as well as the to be launched C2C business early next year.

Chinese Net Users Requested 10 billion Searches Per Month

2007-11-30T16:52:00.000-08:00

According to iResearch column article by Xingning Zhou, the "Survey of 2007 Third Quarter Search Market in China" indicates, from September, 2007, Chinese netizens requested more than 10 billion searches per month. This is the first time China has surpassed US as the largest search market in search volume. At the same time, the search requests numbered 9.4 billion in the US.

At the same time, domestic search giant Baidu expanded it's market share to 73.6%. As the number of net users in China is increasing rapidly, analysts predict Baidu will go pass 80% mark in search market share. China will soon has the largest internet population too.

The positive interaction between Baidu's search and community products has formed powerful competitive force. That is the true secret behind Baidu's leadership in consecutive years.

Baidu has cultivated the largest interactive community with it's huge search traffic in Chinese search market. The powerful cohesiveness produced by it's community products has solidified , strengthened and energized the strong and rapid growth in Baidu search.

And Baidu sees clearly where the future lays. Starting from October, gaming channel, video channel and finance channel came live one after another. It demonstrated Baidu's broadening in territory as well as rising in user loyalty.

Baidu just announced that they will held "100 degree boiling point entertainment award" in Beijing Jan 12, 2008 and planning for "union member electronic competition" as well as many other web activities. These activities will undoubtedly will push the Baidu 100 points higher each time.

King of the Middle Kingdom

2007-11-29T21:52:00.000-08:00

In just released survey of "2007 third quarter search market in China" from iResearch, China has become the largest search market in the world.

In September, Chinese internet users queried search engine 10 billion times, surpassing the amount of searches done in the US in the same period.

Baidu has become undisputed search king in China with more than 73% market share. In the last quarter, over 80% of increased search traffic came from searches on Baidu.

Chibi Delayed, But Perfect World Is Already On Fire

2007-11-08T19:34:00.000-08:00

Perfect World's next big game is called Chibi or the Red Cliff. It is based on an ancient story. During the times of the Three Kingdoms, the two weaker Kingdoms joined hands and set a huge fire which burned almost all the ships from then dominant Central Kingdom, Wei. The strategic victory set all the three Kingdoms on equal footing and the beginning of the Three Kingdoms era.

The Chibi game is delayed due to the delay of the movie named Red Cliff. However, Perfect World is already on fire.

In the just announced earning report, PWRD reported a 65% jump in revenue over last quarter. It is an astonishing 14 times over the third quarter last year.

Comparing the two different picutures presented by Netease and Perfect World, it is very convincing that the model pioneered by Giant Interactive and Shanda which charges for virtual items while offering games for free is working very well in China.

The powerful 3D engine and the beautiful scenes created by Perfect World are attracting millions of fans in China. Three of the four games from Perfect World have less than a full year operating history. The future is very bright for this online gaming company.

Ga Giant !

2007-11-01T18:29:00.000-07:00

Giant Interactive Start it's first day of trading with big splash. The shares gained almost 18%.

It's not as good as a Perfect World deal. However, it's not bad either considering a market crushing day in the US.

According to Netease tech report, Giant Interactive sold 57,197,423 ADS shares with about $886.6 million collected. Giant will mainly use the money for operational and acquisition needs

The deal made GA's IPO the largest from a private owned company in China.

According to CEO of Giant, Shi Yuzhu, the deal will make 21 people 100 million richer. It will also creates 186 millionaires or multi-millionaires.

A humble Shi claims GA is far from building a solid lead in China's online gaming industry. He likes the industry very much because it's clean balance sheet, simple operations with an already successful model. He'd like to continue to focus on product development and leave operations to other top managers.

Can Giant Ring In A Perfect World

2007-10-29T21:42:00.000-07:00

The third largest online games operator in China, Giant Interactive(GA) is ready to set it's feet on the US market. The proposed IPO is likely to be on Nov. 1, the day that a prestigious gaming award ceremony will be held in China.

The IPO is looking for at least $600 milllion which will be a record for Chinese tech companies. The issue has alredy been hyped by many analysts. Some predict the issue will command a premium over what Perfect World(PWRD) has done recently. One reason is that ZTonline(the only game from GA) was the number one online game in 2006 in China on it's first year of release.

The founder of GA, Shi Yuzhu is a math genius with tremendous instincts of marketing. He came down from one of the top 10 riches in China to the "poorest man" in China with hundreds of millions in debt a few years ago. He started his entrepreneurship with ambition to build China's IBM. But later he took a big opportunistic gamble to sell nutritious supplements or "fish oil". He failed miserably by mismanaging the businesses. The old Giant fell to the ground.

Ironically, he fell in love with online gaming business when he played the games under "depression". He started his own online gaming business. He also won high remarks for successfully paid his mountainous debt.

In the past, online gaming businesses in China made money mainly by charging playtime. Shi made a very innovative move by releasing ZTonline free for playing. He liked the idea that players trade virtual gaming wares online so he tried to make money by offering the gaming wares such as costumes, weapons, and even skills for a fee.

The move proved to be a big success. ZTonline became the most popular multiplayer game in China last year. Giant Interactive has made so much money that by only with one game, they ranked third in revenue among Chinese online gaming operators behind Shanda and Netease. Perfect World later pursued a similar business model as GA's free playing model.

However, comparison between Giant and Perfect World favors Perfect World in many respects.

From Baidu's online gaming industry report:

Category 1, top ten hottest online games: Wulin 4, Zhu Xian 7,(both from PWRD), ZT 8(from GA).
Category 2, top ten hottest new online games: Zhu Xian 1, ZT comes out in 2006 and "Giant Online"(from GA) comes out later this year.
Category 3, top ten hottest MMORPG games: Wulin 2, Zhu Xian 5, and ZT 6.
Category 4, top ten downloaded online games: Zhu Xian 8.
Category 5, top ten most watched game producers: PWRD 2, GA 8

Perfect World has four games. Giant has One.

Perfect World games use their 3D game engine. Giant has 2D and will have 2.5D game released soon.

In GA's favor, ZT has been a wild success. In the June quarter, GA recorded revenue of 370 million yuan while Perfect World only had 87 million yuan. Though Perfect World's grew faster with 43% higher revenue than previous quarter. GA's grew 15%.

Both players are trying to enter international market. However, PWRD has already seen rapid uptake by international players with license fees of $1.4 million in March quarter and $2.3 million dollars in June quarter. GA only recorded $240,000 in international license fees in June quarter.

Rumors that the IPO is already "many times" over subscribed. Unless you bet the new game "Giant Online" will repeat ZTonline's success, it may be wise just to sit on the sideline. If you really like online gaming industry in China, buy some Shanda or Netease with much less risk or just pick some PWRD shares for future growth prospect.

Baidu's Record Breaking Q3

2007-10-25T18:17:00.000-07:00

Tech.163 published a nice graphic report on Baidu's Q3 earning report:

Revenue reaches historical high:

Online marketing revenue grew rapidly:

Approaching "one trick pony"?

Rapid growth in operating income:

Slower growth in operation expenses:

Congratulations to Baidu for another outstanding quarter!

Baidu Enters C2C Market

2007-10-17T07:39:00.000-07:00

Oct. 18, Baidu formally announced plan to enter the e-commerce market. Baidu will start from C2C, and intends to build a "largest scale online personal trading platform in the Chinese internet".
Baidu's announcement suddenly pushed the C2C online commerce into a four horse race between Taobao(Alibaba), Eachnet(Ebay), QQ, and Baidu.

Head of consulting firm of iResearch, Yang Weiqing said of the situation:"Baidu's opening of the C2C platform is a major milestone for Chinese e-commerce business. The landscape of the online market will be changed soon".

"Baidu owns the huge and detailed user database. It will provide the solid foundation for their entering the C2C market. Online e-commerce is a major development trend for the future. Baidu will gain their relevant market position in the future online e-commerce field." He said.

from enet.com

CNNIC reports Baidu with 74.5% Market Share

2007-09-25T17:38:00.000-07:00

Sept.25, Chinese Internet Network Information Center(CNNIC) released it's 2007 reports on Chinese search engine market in the 2007 Chinese Internet Conference. This is the third year in a roll that CNNIC has produced the report. Detailed data on different user communities and cities with different development levels are the spotlights of this year's report.

This year's report covers three top cities, seven second-level cities, and fourteen third-level cities in all the seven regions of the country. The survey covered broader area with stronger sample representations. Through cross analysis between different user communities and different level of cities, the user behavior on search applications can be interpreted. The report indicated that the top choice selection of Baidu goes the opposite direction with the level of cities. Google's trend was opposite to that of Baidu. The ratio of selecting of Baidu as first choice among the level 1, 2 and 3 cities were 67.33%, 73.35%, 83.82%. The ratio for Google were 22.11%, 14.78%, 4.99%.

CNNIC report shows that 44.71% of users use search routinely(multiple times per day). It indicates almost half of internet users are dependent on search. Besides that, there are also 17.2% of users use search only once per day. That bumps up search engine users to as high as 61.91% of total internet users and trends toward stronger dependence on search engines.

From year 2000, the number of search engine users were growing at about 12% per year. The growth rates started to slow since 2006 with only 11.32%. So far this year up to Sept. 2007, the new search users has increased 7.7%. CNNIC predicts the growth rate will be slightly downward for the whole year.

(Note: There might be error in CNNIC's prediction. Since Sept. is not finished yet, the data cannot possibly include this month and it is reasonably to assume no data from the entire month due to time requirement to finish their report. If the growth of new users distributes evenly during the year, 7.7% X 12 / 8 would result in a growth rate of 11.55% which is higher than that of 2006. Additionally, since schools start in Sept., it can also reasonably assume the biggest month of new user growth is Sept.)

CNNIC reports found that as a first choice of search engine, Baidu's market share had reached 74.5%. Google had only 14.3%. However, among high end users, Google's market share of 42.32% is not much different from Baidu's 47.72%. High end users are defined as "25 and older, college graduates, monthly salary above 3000 yuan".

CNNIC reports also found "word of the mouth" was the main factor for search engine brand recognition with 54.03%. Found search engine while "surfing" was second factor with 41.33%. There were only 8.05% of users got to know search engines through embedded search window on their frequently visited web sites. Even lower percentage of users got acquainted with search engines through online advertising. That number came in at 7.81%.

From Hexun (in Chinese)

Google.China to start massive marketing push

2007-09-20T20:08:00.000-07:00

Sept. 21, Sina Tech report- President of Google China, Kai-fu Lee said last night, Google is planning a massive market promotion in the next few months. The move is aiming to attracting more users to try Google search and other Google products. So far, Google has been steadfastly refused to initiate any marketing activities.

Kai-Fu Lee made the remarks while participating the advisory forum organized by CIC consulting. He indicate that the marketing push aims to increase user traffic, to guide and suggest users to tryout Google products.

"Google has not done any promotion so far. However, there are many beginner users in China and there are also other branded search engines." He implied that the special situation in China makes marketing necessary. But he also emphasized that it would not be a simple marketing move for Google brand.

Kai-Fu Lee's remarks may indicate that Google's localization effort is going smoothly and their confidence about the quality of Google's Chinese search is high.

Kai-Fu Lee said that, internal tracking data indicated that Google's quality of Chinese search continues to go up and already has gap with other search engines. "The gap with other search engines is getting bigger." Lee said. If more users are willing to try Google, he's confident that they will be converted to Google users.

From just released survey results by CIC consulting, 23% internet users in China have Google as first choice search engine. However, Google's main competitor Baidu had a huge lead with 69.5%.

Google dominated in the major search markets such as the US but has met major resistance in China. In the last two years, Google has made major push in China but the progress has been slow. And it has forced Google to try it differently by making localizing efforts to win Chinese users. Besides making special Guge.com site for China, Google also started collaboration efforts with Xunlei, 265.com, China Mobile as well as Sina to attract more search traffic.

But Lee also refused to comment on future market share. He thinks though Google's Chinese search is ahead of competitors', it will take time for users to pick Google as "first choice". "it's hard to predict the actual rate of market share gains" he said.

Baidu Launches Olympic Channel, Goes After The "Big Cake"

2007-09-20T17:44:00.000-07:00

Sept. 20, Beijing - Baidu held a press conference today at the Shangri-la Hotel and formally launched Baidu's Olympic strategy -"Baidu 2008 Story". The new interactive platform for the Olympic Games will be channeled at (http://2008.baidu.com). Representatives from several Olympic sponsors, such as Samsung, Yili, and China Airlines attended the ceremony.

It is learned that search traffic directing, interactive communities and user behaviors data analysis for the Olympic Games will be the major features of "Baidu 2008 Story" that distinguishes it from Olympic strategies from other media outlets. Head of Baidu's Olympic platform, Wang Xiao said: "We will utilize the world's leading Chinese search technology, to guide the hundreds of millions of Olympic-related inquiries daily to the best Web sites that users want. This will not only promote an environment of efficiency and fairness for the Olympic media coverage, it can also greatly highlight the authoritative nature of Baidu as a new media. "

Prior to this, Sina, Sohu, and Tencent have already released their individual Olympic strategies. Industry analysts think that by releasing it's strategy now, there is no doubt that Baidu is going after the enormous commercial potential of the Olympic Games. Also yesterday, Baidu has quietly launched it's online game channel. Baidu's determination to go after the two "big cakes" of online advertising will unquestionably make a huge impact to the entire Internet advertising industry.

At the same time, Baidu also released a statistical report on Olympic-related internet users behavior. Baidu will continue to release updated statistics report on Olympic related communities, and hopes to be able to attract more brand advertisers.

reported by ccidnet(in Chinese).

iResearch report on BaiduTV

2007-09-19T19:41:00.000-07:00

Today, iResearch published a report on BaiduTV's influence on online video industry.

The report considers BaiduTV as a major milestone for Baidu for several reasons.

The online video advertising service will utilize the over 150,000 union member's resources with very broad reach. Many of these small sites are dependent on sharing Baidu's ads revenue for living. Adsit will serve as BaiduTV's exclusive agency and will provide all the video ads services to advertisers(similar to the role of Doubleclick). The arrangement will be very attractive to advertisers who are willing to invest in video ads.

The rapid expanding user base is also important factor. Since the launch of Baidu video search, Baidu has seen unparalleled growth in number of users.

The bar graph shows the number of users each month. The numbers are in 10,000. Total number of users has grown from Feb's 1.8 million to over 17 million in Aug. The blue line shows month over month growth rate, almost doubling every two months.

The system has very unique ecosystem. Adsit will connect advertisers through Baidu's video search with relevant contents from advertisers. Adsit will input video ads either through pre-roll or with ads before connecting to websites of Baidu's union members. Adsit also provide follow-up analytic data to advertisers.

The full report in Chinese here.

Baidu Officially Launch Online Gaming Channel

2007-09-18T21:47:00.000-07:00

September 19, Baidu today officially announced its online gaming channel at game.baidu.com.

Based on Baidu's leading search technology platform and strong community services, the most notable characteristics of the service will be the combination of search for professional gaming resouces and the player communities.

"Search for gaming resouces can reach many contents such as fighting strategies, game-related news, and notes associated with the games, it can even find parameters for specific game equipments and user information. After landing on Baidu's gaming channel, players will find Baidu can provide all relevant information with the best coverage, the most accurate and also the fastest. This is typical of Baidu's products. " Head of Baidu's games channel, Chen Feng said.

Built on top of search for gaming resources, Baidu will also bring the experiences of building communities into the games channel. "Players can register freely and publish games related articles and comments. We plan to provide guidance through a variety of mechanisms, gradually to make all the contents user-generated, similar to post.baidu(bulletin board) and zhidao.baidu(answers) services. "He said.

Since Baidu covers the majority of Chinese internet users, especially young internet users, many Baidu users are also online game players. Baidu games channel could become important entry point for major gaming companies to attract new users, and so far it has already drawn great attention from domestic online gaming industry. "The emergence of Baidu games channel provides access to a variety of information and exchange of experiences among players. It displays the colorful entertainment world of online games in front of us in reality. It is a good thing for every players. " Chairman of Shanghai ZTgames, Si Yuzhu said.

Chen Tianqiao , Chairman of Shanda, the largest online gaming operator in China, indicated that, with Baidu's powerful technology platform and great influence, the gaming service could have big and far-reaching impact on China's online gaming industry.

It is learned that a number of leading domestic online game producers have reached long term deals on content sharing and traffic redirecting. In 2006, China's online game market has reached 7.8 billion yuan. Gaming resources as well as community building has become new focus for the growth of the online gaming industry.

Reported by Wang chuan from ccidnet(in Chinese).

Baidu Market Share Broke 70% Mark In Beijing

2007-09-17T21:00:00.000-07:00

According to Chinabyte report, CIC has published 2007 Chinese search market survey result.

Comparing to one year ago, Baidu continues to gain market share in BSG, the three largest cities in China: B(Beijing), S(Shanghai), and G(Guangzhou). Google's market share in BSG has bottomed and rebounded slightly. Yahoo and Sogou's shares dropped further.

Famous web analyst, founder and chief-analyst of CIC, Bowang Lu led the design of the survey as well as writing the summary report. He thinks there are a couple of surprises in the survey result. One is that Baidu's market share has broke the 70% mark. The high ratio was really a surprise. The other surprise was Sohu's share drop(considering Sohu's exclusive sponsorship of Beijing Olympic Games).

Defined as first choice of search engine, Baidu's share was 69.5% in BSG markets. Google/Guge combined for 23%. The market are further concentrated into the top players.

Baidu's market share in Beijing and Guangzhou grew faster accompany with a slight drop in Shanghai. Lu thinks it may indicate that Google gained against Baidu among Shanghai users.

Though Google's share dropped 1.1% from a year ago. But it was actually up 1.4% from six months ago, indicating a rebound for Google's share.

The main source of new users of Google are coming from students. Baidu's share in high end users passed further over Google and the gap has expanded.

More than half of users had positive comments on Google's improvement

Two months too long? Try two days!

2007-09-17T20:10:00.000-07:00

The talk about Baidu's online gaming service is heating up.

After Netease Tech reported yesterday that Baidu will roll out online gaming service in two months, Sohu Tech's report has gone further. It said that Baidu will formally launch the service in two days!

There were rumors that Baidu has hired away the founder of online gaming portal 17173.com. Sohu IT cited reliable source that Baidu has set up ambitious goal as early as begining of the year.

The positioning of the service is now the focus among analysts. Some indicated that Baidu could choose from a variety of options such as content aggregator, vertical search or community information services. In any of cases, it will mark Baidu's further march into the "new media" era.

Online gaming(video games, not gambling) has been the largest revenue generator for China's web companies with huge population of players. It is still the main source of revenue for several of China's largest internet companies such as Shanda, Netease, The9, as well as recent IPO winner Perfect World.

To build a springboard for many different gaming services will certainly be welcomed by many internet users. In doing so, Baidu is hoping to generate revenue by both getting a small cut of the rich margins that online game operators now enjoy and by attracting gamers to many other Baidu services.

Baidu May Roll Out Online Gaming Soon

2007-09-16T20:32:00.000-07:00

According to unconfirmed report from tech.163.com, Baidu may roll out online gaming channel soon. The report talked about an analyst's comment on Sohu's intention to build online blog advertising union in order to compete with Baidu Union, a service similar to Google's Adsense.

Also said in report, in 2003, Sohu bought online gaming portal 17173.com. Recently, rumors indicated that the founder of 17173.com has joined Baidu. Baidu will roll out it's own online gaming channel in two months.

Baidu Rolls Out BaiduTV

2007-09-12T19:59:00.000-07:00

Baidu will formally launch BaiduTV tomorrow. BaiduTV is a similar online video advertising service as Google's video Adsense.

BaiduTV will be launched with several format:

1. Banner video
2. Embedded video:
3. Picture-in-Picture:
4. Video inserts:
BaiduTV is a major effort for Baidu to enter the lucrative branding advertising market. As Olympic Games getting closer, the gigantic consumer market in China will unquestionably draws the attention for many large multinational firms worldwide.

Another interesting figure from iResearch

2007-09-03T16:49:00.000-07:00

iReseach published another interesting figure for Baidu users on Sept. 3, 2007.

In the above figure, blue line indicates the percentage of Baidu users who only visit zhidao.baidu(Baidu Answers) service. The yellow line indicates the percentage of Baidu users who only use Baidu search without visiting zhidao.baidu. The green line indcates the percentage of Baidu users who not only search on Baidu and also use Baidu Answers at the same time.

Baidu Answers 20 Million Questions

2007-08-30T22:41:00.000-07:00

Today, Aug 31, 2007, a milestone will be set for Baidu Answers service. Twenty million questions will be answered by the popular service in China.

The world's largest interactive community based service is becoming one of the strongest driver for Baidu's user traffic growth.

"The contents are more reliable. The capability of problem solving is stronger. The usability is getting better. And more and more users love the service." said a proud Baiduer Yu Jun, who is vice-president of products at Baidu.

Baidu Answers Traffic Jump

2007-08-20T23:05:00.000-07:00

Aug 21, 2007, iResearch reported that, according to the newest iUserTracker data, Baidu Zhidao(answers) service realized a huge growth in effective visiting time between the third quarter of 2006 and the second quarter of 2007. The numbers was less than 20 million hours but jumped to more than 42 million hours. The time spent was more than doubled.

Comparing with other services, the effect driven by the Answers service to the overall traffic is evident.

According to iResearch's analysis, the multiple functions of the service and it's award system has motivated many users for their participation and become a magnet for web users. The strong growth of the service and it's effect on overall traffic further validated the search engine's model of "search+community". iResearch believes the tight integration is future for web 2.0.

In the above fig:

the green line indicates traffic from post.baidu

yellow line indicates traffic from MP3 search

Blue line indicates traffic from zhidao.baidu, the Answers service

Grey line indicates traffic from Baidu's new blog service, hi.baidu

Baidu Started Video Ads Service Trial

2007-08-20T20:17:00.000-07:00

Aug 21, 2007, according to Sina tech, Baidu has started video ads trial "Baidu TV" in Baidu Union member sites.

The head of Baidu's Union partnership, Xiao Ming indicated that, The websites of Baidu's Union members will be embeded a "screen"gradually, "If you look at every website of our Union members as a wall, Baidu will choose the most suitable surface, install a screen. Web users will be able to enjoy web ads the way they watch TV". And that is also where the name of "Baidu TV" comes from, according to sources.

So far, Baidu Union has expanded to 150,000 partners. There are over 5000 Baidu's advertising customers are involved in a variety types of marketing activities in these Union sites. Baidu's Union members shared about 80 million yuan in revenue from Baidu in 2006. So far in the first two quarters, that number has almost already been reached.

Google Chasing Baidu for Answers

2007-08-19T23:31:00.000-07:00

On Monday, Aug. 20, 2007, Google joined hands with Tianya.cn to launch a Q&A service in China.

Baidu Answers(zhidao.baidu.com) has been very successful in China. Robin Li, CEO of Baidu claimed recently that Baidu Answers has become the largest interactive community service in the world.

Tianya Q&A is now provided at Tianyaclub, a community site in China similar to Myspace and Facebook. The service labeled as "powered by Google technology". There's rumor in China that Google has taken a majority stake in Tianya.cn.

With Olympic Games approaching, the answers service could become a golden nest for branding display advertising. To launch the service at this moment, Google seems determined to grab a piece of the huge Olympic pie.

Baidu Chat Is Coming?

2007-08-16T18:01:00.000-07:00

In his personal blog(in Chinese), Baidu's CEO Robin Li said he liked the name of Baidu Chat.

In a widely distributed image on the internet, an unknown fan created the image for rumored Baidu instant messenger and named it as Baidu Xiaosheng(or Chat).

In a simple but intriguing message, Robin said :"It is a good name. I like it but don't know who's the one that created the idea."

Many think he might have indirectly revealed that there is indeed a Baidu instant messager in the works. He might also trying to invite the creative original author to come forward to work for Baidu. Many fans like the name too and suggest that Baidu just use the name in their comments.

Baidu Could be Olympic Winner

2007-08-12T23:02:00.000-07:00

Internet Tracking Center(www.weamax.com) issued a report on Aug. 10 which predicted that Baidu would be the biggest winner in the battle for Olympic related advertising.

On August 10, 2007, according to the Internet Tracking Center report, Baidu's vice president of business operations, Shen Haoyu said that Baidu will be reporting Olympics with a new media style but kept specific operational strategies secret.

We have all noticed that not long ago, Sohu just went public with it's claim of exclusive rights of sponsoring the Olympics on the web and warned other media outlet not to violate such rights. On July 19, 2007, Sina, Netease, and Tencent jointly established the Olympic coverage Union to challenge Sohu's monopoly. As many as 38 members have since joined the alliance so far.

Sohu is accused of trying to use the "rules" to monopolize all Olympic related advertisings. That behavior directly hastened the birth of China's Internet historic moment, the Olympic coverage Union, an alliance of sharing of resources and sharing of interests. The dusts are still unsettled at the moment. Baidu's action now is undoubtedly a detrimental blow to Sohu.

The joint news flow from the three major portals could post tremendous threat to Sohu's web traffic. Since each has it's own special areas, the advertisers would be willing to work with as many channels as possible. With the precision marketing technology to target specific groups of audiences, Baidu is even more attractive to advertisers.

In this Olympic battle, Baidu is likely to be the biggest winners. Baidu is a technology-based company itself, coupled with its many community based services. If fully utilize it's huge customer resources, Baidu can deliver more precisely targeted ads and create more economic value.

Whether merchants or websites, their biggest desires are relying on the Olympics to improve their brand images and influence on the public. We have reason to believe that apart from the three major portals of the Olympic Union, many businesses will choose to invest in Baidu's precision marketing.

Additionally, Baidu is headquartered in Beijing, with host advantage to the Olympic Games. As the flagship enterprise in the Zhongguancun high tech zone, Baidu is also likely to get favorable treatment from the government. Together with it's own superior strength, Baidu's Olympic action is likely to take them to a new high point financially.

These are the reasons for us to believe that in this Olympic battle on the web, Baidu will be the ultimate winner.

Baidu Promotes "Precision Marketing System"

2007-08-11T14:11:00.000-07:00

At last year's first Baidu World Forum, Baidu started testing the "Precision Marketing" advertising tools. techweb.com.cn reported from this year's Baidu World, Baidu has perfected the tool and formally announced the "Precision Marketing System".

After more than a year of testing and feedback, combining the development of a new cutting-edge advertising technology and management tools, Baidu has created the marketing system focusing on "precision targeting". Reporter found out today at the Baidu World Forum 2007. In the future, Baidu customers can use the three "powerful marketing tools" of the system including wider coverage, more precise targeting , and more comprehensive services and management.

In July 2006, the first Baidu world, Baidu launched precision advertising services. This advanced technology relies on Baidu's massive database of search behaviors of internet users to conduct in depth analysis. The system can then be delivered precisely by targeting the desired audiences. Since it is launched 12 months ago, BMW, Mercedes-Benz, Haier, Nike, Samsung and other world famous enterprises have chosen this service.

Baidu Chairman and CEO Robin Li said : "Whether search or community activities, internet users are self motivated by their natural initiatives. We can find the exact consumer groups through data collection and analysis due the interactive nature of our new media services."

"The upgrade of the service to a system provides 'three powerful weapons' of wide coverage, high-precision and multiple tools. First, in the past we could only target specific individuals. Now, we can deliver precise targeting base on industry, community and behaviors. More importantly, behind the precision system, not only we have the database of search behaviors, but also research data on community behaviors. The accuracy is much higher. Besides that, before delivering the ads, data analysis of internet users, the very insightful Baidu's data reports and Baidu indicators are also organically incorporated into the system for the first time." said Shen Haoyu, vice president of operations at Baidu.

Currently the number of Internet users in China has reached 144 million, more than 90% of Internet users had used Baidu, daily production of large volumes of data has formed the country's largest Internet behavior database. Addtionally, the advantage of Baidu's leading position and Baidu's internet technology formed a solid foundation for Baidu to build the Precision Marketing System in China.

Shawn Wang: We are in early stage

2007-08-09T22:30:00.000-07:00

How big really is the Chinese search market economy? With a market cap approaching 7 billion dollars, Baidu believes that the current market is only just the beginning.

Yesterday, in Beijing at the "Baidu World" conference, Baidu's CFO Shawn Wang had an interview with reporter from Shanghai Securities News. Recently, Baidu has been voted the "most influential overseas-listed Chinese companies" by the newspaper.

Reporter : Oversea's financial analysts have very divergent views on Baidu's valuation, how do you view this issue?

Wang : It's not an easy thing for foreign financial analysts to value Baidu since we gave little guidance. Doing so is because we don't want to be in a position to be scrutinized. We at Baidu knows the search marketing in China is still in it's infancy stage. We must create a good operational environment ourselves. We have seen earlier oversea-listed Chinese companies complaining about over involvement of Wall Street investors.

Reporter : So what's the reasonable valuation for Baidu?

Wang : Regarding the value of Baidu, this is a very difficult question to answer. But there are several key comparative figures we can look at. If you compare China's economy and the economy of the United States, the scale of China's economy is about 70% of the scale in the United States and soon to become the world's second largest economy. In regard to advertising, the scale of China's advertising market is only one twentieth of that of the US. China's online marketing is about one fortieth the size. China's search market is probably only one sixtieth of the U.S. search market.

In contrast, the Chinese market is even more suited for search economic development. The Chinese market is currently in a more entrepreneurial atmosphere. China has a large number of emerging enterprises, the SMEs looking for expansion but lack of a unified domestic market. Baidu's PPC service provides SMEs with a perfect platform. Therefore, China's market environment should be more conducive to the economic development of search.

However, many SMEs with capacity of spending are not very familiar with the Internet. That is why Baidu have built such a large marketing and customer service teams. What Baidu is doing is like a missionary in spreading the seeds.

Reporter : Currently there is a huge gap between Baidu's market capitalization and revenue and the international giants such as Microsoft and Google. How to avoid a hostile takeover? Does this gap put pressure on Baidu for doing business?

Wang : First of all, all these multinational giants have experienced the same stages that Baidu are experiencing, though Baidu's growth rate has far exceeded theirs. As for the hostile takeover, Baidu listed in the beginning of a specially made arrangements, the so-called "Newcastle", in order to prevent hostile takeover by foreign investors. Baidu is not concerned.

reported by Shanghai Securities News.

Baidu plans brand advertising in it's community properties

2007-08-09T21:57:00.000-07:00

August 9, Baidu's vice president of commercial operations, Shen Hao-yu said that in the future Baidu will continue to increase brand advertising marketing, and will incorporate brand advertising in Baidu's community service products .

In today's Baidu World Forum, vice president of operations of Baidu Shen Yu-hao, released Baidu's latest marketing strategy. Baidu will continue to strengthen brand advertising which has seen rapid growth recently. Baidu will incorporate brand advertising into more of it's search products .

Shen Hao Yu revealed Baidu's directional marketing plans for industries. It will divide the community products into different channels. Then it will combine all the community products together around a specific common interest to serve as a common platform for brand advertising. In one example, Shen said "Baidu can search a topic such as car or travel among all the community products, including hi.baidu, post.baidu, and baike.baidu. The brand advertising can then be embedded side by side with the results, just like what we currently doing with brand advertising."

A Baidu person said that while both the brand and keyword advertising have increased, but the brand advertising has been growing faster in absolute terms. Brand advertising will be in even greater proportion of revenue in the future.

reported by tech.qq.com

Google vs Baidu video

2007-08-09T21:48:00.000-07:00

Update - here is the full length Google video:

Google's Kai-Fu Li Apoligizes to CCTV but not Baidu

2007-08-08T22:53:00.000-07:00

Google's Kai-Fu Li apologized to CCTV today in a letter addressing the storm caused by an internal promotional video.

"That's not the thing we should do and it violated Google's business culture". Li wrote in his letter to CCTV. In the widely spread video, Google employees imitated CCTV's news program, repeately using "one center, two principles", "CCP", "State Council", "Red Sun" to label themselves. "This might have hurt the feelings of the Chinese people" Li apologized in the letter.

Li admitted the video is indeed made by Google for the Spring Festival. The manuscript was written entirely by one front desk employee but many staff from both Beijing and Shanghai as well as channel resellers participated. "it was intended to have some fun internally, but unfortunately it has been leaked out so many months later. We totally unexpected this." Li said.

In April, Google apologized for copying Sohu's dictionary and rumored to have angered the US headquarter. Only months later, here is another apologizing letter. People may start to wonder about Google's ethics and their public responsiveness. Google's China journey is getting harder.

From report by Ren Zhong(in Chinese)

Add: Most Chinese internet users are getting used to these kind of videos and seem to understand the humor and take it lightly though.

Baidu simply said that the video "wasn't that good".

Kai-Fu Li actually appeared in the video. Most part of the video use many slogans to label Google employees "righteous" communist and repeated label Baidu as "many poisons"(sound like).

Part of the video now found it's way to Youtube, have fun watching those stiff Google communists :)

Baidu started the video game with this one:

Baidu Card

2007-08-08T22:05:00.000-07:00

August 9, 2007 Beijing

"Baidu World Forum 2007" is being held in Beijing today. More than 2,000 customers, users and partners attended the annual meeting. Baidu and China Merchants Bank announced that they have reached an important strategic cooperation agreement. Both firms will jointly issue debit cards "Baidu Card" to better serve the over 120 million registered Baidu users. They also signed agreement code named "Golden SME growth" package of financial services. The package of over 30 categories will provide Baidu's online marketing customers with services including speedy financing, one-on-one consulting and Baidu data services.

Issue of "Baidu Card" will have Baidu homepage as the design theme. It is expected to cause a frenzy among tens of thousands of fanatical Baidu fans. Moreover, as China's largest online marketing promotion platform, Baidu has already established complex relationships with the tens of thousands of businesses. Baidu will sign up most of these businesses. When using "Baidu Card", they will be able to enjoy all the special services for these marketing customers. Individual users can get Baidu Card in any of the China Merchants Bank outlets in accordance with the normal process for the card.

China Merchants Bank is starting promotion for the card nationwide today. The "Golden SME growth" plan will be gradually rolled out in two months. Many addtional benefits for Baidu Card owners provided by China Merchants Bank will also be announced shortly.

from hexun report(in Chinese)

Robin Li: Go International

2007-08-08T21:31:00.000-07:00

Aug. 9, 2007 Beijing.

In a keynote at the Baidu World Forum 2007, Baidu's chairman and CEO Robin Li pointed out, there is no other choice but expand worldwide.

"From the fundamental point of view, a business should not have a national border. When you reach certain stage, it is a must to go international." Li said. Although domestically, you can have certain covers under protective policies. As the market continue towards openness, especially entering WTO, businesses will have to face a more open and free market economy. There will be no difference whether you are an international or non-international business.

He also said that, Baidu has achieved certain success in the last seven years. Now, "we must go out. If not, sooner or later, we will likely lose the Chinese market too."

Li indicated that, if a business can do a super job in one market, but so so in other markets, it only indicate the unhealthiness of the business. "for any business, there is no other choice but to go international".

from enet.com.cn report (in Chinese)

Baidu starts "Wenhua" service

2007-08-08T20:09:00.000-07:00

Aug. 9, 2007 Beijing.

In the Baidu World Forum 2007, first annoucement being made is that Baidu has been officially chosen as exclusive search engine partner for the "national cultural information sharing project".

Baidu's specially designed wenhua.baidu search service is now live. This is the first time the national culture project starts collaboration with a search engine. It also marks Baidu's major move in promoting digital dessemination and utilization of national culture heritage.

"National Cultural Information Resource Sharing Project" is a public work led by the Ministry of Culture, jointly organized and implemented with the Ministry of Finance. The CPC Central Committee and the State Council attach great importance to the project. It also listed as important public culture project in the "11th Five-Year Plan". The project will vigorously integrate various cultural and information resources from national libraries, museums, art galleries, art research institutions into components of the databases and to make them widely accessible through the internet. More than fifty categories including all nationalities, ancient architectures, history, heritage, rare books, dramas, etc.

Baidu is undisputed leader in Chinese search engine services. It is also interesting to note that by choosing a domestic partner, the government may intend to keep national heritage resources in the hands of Chinese. Consequently, this move may further strengthen Baidu's dominance in the Chinese search market and put Google in a disadvantage position.

Baidu World Forum 2007

2007-08-08T20:03:00.000-07:00

August 9, 2007. Baidu World Forum 2007 Opened at Beijing.

Baidu World is an annual forum hosted by Baidu that brings together Baidu's users, customers and partners. As the world's largest Chinese language website, with the most extensive user base and the most influential new media applications, Baidu is influencing the way people find information, which in turn influences the way people live.

At Baidu World Forum 2007, Baidu's second annual forum, Internet government officials, international marketing experts, multi-national CEOs, Chinese business leaders, economists and industry analysts will discuss the topic "Looking for China's World-Class Companies". In addition, Robin Li, Baidu's Chairman and CEO, will offer his thoughts on Baidu's World and industry specialists will discuss the changing trends in new media.

Google's Chinese News Traffic Jumps In The First Half

2007-08-05T11:43:00.000-07:00

iResearch released new data from it's iUserTracker for June, 2007.

Among all major Chinese news search services, Baidu ranked number one with 69.3% coverage follwed by Sogou(Sohu's) and Google with 16.4% and 13.3% respectively. Netease came in at fourth with 11.7%.

(image from ITBEAR, green line indicate data fro Baidu, blue line for Google, and yellow line for Sogou)

Look at the trends, Baidu continue to dominant. Baidu has been well received among Chinese internet users and become the first choice for most Chinese looking for news.

Google's news coverage has seen significant increase in the first half. It's traffic increased from only 4.5% in January to 13.3% in June, gaining nearly 9% of traffic shares. The collaboration with Sina and other major portals has played important roles. Combining with Google.com with Google.cn, Google's Chinese news service would be ranked number two in China.

It's also noteworthy for Sohu's Sogou service. During the first four months, it's performance has been flat. Since May, the traffic share of Sogou started to take off. Especially, it's share jumped in June to 16.4%, up 6.3% from May.

From the report in Chinese.

Baidu Hikes "Hiers" Happier

2007-07-31T19:26:00.000-07:00

According to a ccidNet report(in Chinese), Baidu announced that the capacity of personal album in it's blog service, hi.baidu(also called baidu kongjian or baidu space), to 1GB from 100MB.

The move makes hi.baidu one of the largest personal album service on the web. To make the users (whom are called "hiers") even happier, Baidu also lift up the size limit of single photo upload to 3MB from 500K without need of file compression.

According to Baidu, the number of photos uploaded on to the hi.baidu blog servers are quadrupling of number of posts uploaded. The upgrade is to "better meet users demand".

Since hi.baidu went to live one year ago, the service has undergone 121 upgrades. Many personalized and interactive features were added. Such as kongjian search, people search, newest visitors, and friends online. Baidu also added WAP version to make wireless access much easier.

Earlier this year, Baidu has placed the hi.baidu service on the prominent position on it's home page right underneath the search window. The unusual focus on the blogging service means Baidu intended to make it one of the core services that bounds the communities together around the search engine. The three horses of hi.baidu, post.baidu, and zhidao.baidu services form a solid foundation for Baidu to further explore new models of commercialization.

iResearch Report on Baidu

2007-07-30T06:59:00.000-07:00

iResearch analyst Tian Xing today released a research report (in Chinese) on Baidu's strong second quarter result, titled: "Three factors contributed to Baidu's wonderful second quarter result".

According to Baidu's second quarter earning report, revenue totaled 401.3 million yuan ($52.7 million). Year over year growth rate was 109.4% and quarter over qaurter growth rate was 46%. Net income was $18.6 million, an increase of 142.7% over the same period of last year.

Noticeably, there are large increases in two categories: One is the number of active customers jumped to 128,000, an quarter over quarter increase of 14.3%. The other is the average spending(AURP) reached $407.3, an increase of 24.0% quarter over quarter.

iResearch thinks Baidu's seond quarter result benefited from three major factors:

First, the good economic development environment surrounding the Chinese internet

China's special large number of over 30 million small and medium enterprises forms the huge fundamental power base for the commercial application of search engines. More and more businesses are realizing the effectiveness of using Baidu as a marketing platform. Combining with the maturing of the marketing skills of the search engines themselves, the overall environment is promoting the rapid development of search marketing.

Second, successful localized search products increased the traffic

The data from iReseach's iUserTracker indicates, Baidu's traffic increased significantly both from home and office online users. Monthly total visits reached 1.85 billion times, a big increase from first quarter's 1.6 billion. At the same time, time spend per visit also increased to 37 min from first quarter's 30 min. Especially, the two-year old Baidu Zhidao(answers service) is gradually becoming a very sticky online community. During second quarter, visits to Baidu Zhidao reached 400 million, with average visiting time of 13 min, and contribute significantly to the overall traffic.

Third, the beefing up of direct sales force is helping convert potential customers

Baidu continues it's expanding of sales force in several important districts in the last few qaurters. To meet the ever growing demand, the development of sales and customer service teams is helping Baidu winning potential cusotmers. The number of active customers during the second quarter increased to 128,000, 14.3% higher than last quarter.

Overall, iResearch thinks that, besides the good economic environment surrounding the Chinese internet, the major factors mainly coming from the further improvement inside Baidu. Baidu has better localized strategy for China. Whether on gradually releasing products that fits Chinese users' appetite or on further improve it's sales strategy and sales channel that fits the small and medium Chinese cities, Baidu is well focused.

Perfect World Continue to Surge

2007-07-27T17:06:00.000-07:00

Perfect World continues it's journey to the west. After jumped 27.5% on it's first day, the stock gained another 25.5% today on Nasdaq stock market.

The educational software maker turned online interactive game creator and operator has faired nicely on two big down days in the US markets.

Additionally, the company's revenue started to ramp up just in the last six months. It was $1.7 million in the Sept. quarter last year, then $6.1 million in the Dec. quarter.

During the March quarter, this year, revenue totaled just over $11 million and was profitable for the first time with about 11 cents per American deposit share. All figures are in US dollars.

Near Perfect World

2007-07-26T18:21:00.000-07:00

Perfect World(PWRD) finally made it to Nasdaq today.

Here are our previous coverage of Perfect World.

The IPO of Perfect World did not do nearly as good as Baidu in a major down market. Nonetheless, it still surged 27.5%.

Revisit The Numbers

2007-07-25T15:39:00.000-07:00

Back in Sept. 2005, we made a comparison between Baidu and baby Yahoo: Put Numbers in Perspective

Now let's make a new comparison:

As a public company, Yahoo announced it's 10th quarterly financial report on July 8, 1998.

Reveune totaled $41.2 million.

Net Income was $8.1 million.

Baidu has been public for 9 quaters now.

As reported today, Baidu's second quarter results shows:

Revenue totaled $52.7 million.

Net Income was $18.6 million.

Yahoo's market cap reached $15.5 billion at that time before bubbling to almost $180 billion.

Let's see how Baidu's stock will perform.

Preview Baidu's Earnings

2007-07-24T18:07:00.000-07:00

Baidu will report second quarter earnings tomorrow. Here is the webcast link.

Baidu estimated revenue for this quarter will be 378 to 388 million yuan.

Yesterday, Analysys International just announced their market data for the second quarter.

Previously, they estimated that Baidu's first quarter was 281 million yuan. Baidu reported actual revenue at 275 million yuan.

As indicated in their analysis, Baidu's second quarter revenue should come in around 382 million yuan. If their analysis will be as accurate as last time, Baidu's should report revenue just above the low end of their estimate, or about 370-380 million yuan.

The only thing might help Baidu out for this quarter could be branding advertisements.

Due to the popularity of zhidao(answers), post(bulletin board), and MP3 services and visibly increased display ads on these service pages, the branding ads could bring significant revenue this quarter. As indicated by Charles Zhang, CEO of Sohu, the money for the 2008 Beijing Olympic Games are coming in super strong.

Hopefully, Robin Li will give us a hint on how valuable the Baidu properties are for the coming 2008 Beijing Olympic Games.

On the latest service release, data.baidu went to live today. The service is similar to Google trend combing with analytics. On top of the list of many rankings, the banks are in dominate position, perhaps indicate it's importance on Baidu's future strategies.

Analysys Data On Second Quarter Search Market

2007-07-24T07:07:00.000-07:00

Analysys International published research report on second quarter search market in China.

During second quarter, 2007，total revenue from search engine providers reached 657.5 million yuan. Quater over quarter growth rate increased dramatically to 33.4% comparing with 3.4% recorded in the first quarter.

Market shares were further concentrated into the top players. Baidu's share increased from 57% to 58.1%, gaining 1.1% market share over last quater. At the same time, Google.China continued it's upward move. Google's market share reached 22.8% from 18.7%, a gain of 4.1% in only three months' time.

Olympic Money Are Pouring In, Claims Charles Zhang

2007-07-23T22:51:00.000-07:00

Charles Zhang, CEO of Sohu, claimed that Olympic money are pouring in for Sohu.

Sohu spent 100 million yuan to buy the exclusive online rights of 2008 Olympic from the organizer of the games. He said any advertiser who has web advertising products with Olympic theme must go through Sohu and that is why he's seeing the big money are coming to Sohu.

Zhang revealed the trend at a news conference when he annouced the blog focused third generation of portal Sohu 3.0.

Separately, he dismissed the threats from the Olypmic alliance formed recently by almost all the other major portals in China. The alliance is trying to challenge the exclusiveness from the deal between the 2008 Beijing Olympic Organization and Sohu.

China Central Bank Increased Interest Rate

2007-07-22T21:55:00.000-07:00

Chinese Central Bank increased interest rate on one-year deposit from 3.06% to 3.33%. At the same, it also cut tax rate on dividend of bank deposits from 20% to 5%.

By the noon time, Shanghai stock market index SSE is up by more than 2.5%.

Annual BaiduWorld Coming Up

2007-07-22T21:39:00.000-07:00

Annual Baidu World Conference will be held Aug, 9 in Beijing. The "2007 Baidu World" will be the second time for such conference. Baidu is the largest Chinese search engine. With the largest coverage and influence over the Chinese population, Baidu is changing the way people obtain information through powerful new media, and the change the living style of the population.

Robin Li will deliver a keynote speech. Special guest includes top business leaders from KMG, Nasdaq, Intel, Ericsson, Nokia, as well as world famous economist, and domestic top consultants and analysts.

Chinese Internet Population Reaches 162 Million

2007-07-18T20:21:00.000-07:00

July, 18 Beijing

Chinese Internet Network Information Center (CNNIC) released the 20th survey of Chinese internet development. By the end of June, 2007, total internet population in China reached 162 million. Every minute, there are 100 new users joins the internet mass. The total number covers about 12.3% of all Chinese. Broadband access reached 122 million people. There are 44.3 million people accessed internet through mobile phones. The total number of .cn domains passed 6 million and surpassed .com domains for the first time.

Currently, there are 67.1 million PCs connected with internet, an increase of 7.7 million in the last six months. With the lowering of wireless internet access fees, mobile internet access has become a fashion and reached 27.3% in total access. Access through internet cafes reached 37.2% and higher than the number of people who go online at work.

The report also revealed the online usages of Chinese internet users:

News and search - 76.3%
Instant messages - 69.8%
Email - 55.4%
Online music - 68.5%
Online games - 47.0%

However, the usages of living assistance is relatively low. Only 15% of net users search jobs online. 25.5% make online purchases. There are merely 3.9% make online travel reservations. One notable number is that there are almost 20% of internet users trade stocks online following the increased activities in the domestic financial markets.

Student users are reaching 60 million.

5fad.com sued Baidu the 4th time

2007-07-17T21:21:00.000-07:00

According to Sina.com report, the online music company 5fad.com again sued Baidu for copyright infringement in Beijing's high court.

5fad.com accused that Baidu had ignored repeated requests from them to take down unauthorized links to songs that 5fad.com owns the copyrights and asked 100 million yuan for damages.

Previously 5fad.com filed lawsuits against Baidu's MP3 service three times and have lost each time.

EMI Music had also filed lawsuits against Baidu before but recently had turned around and agreed to work together with Baidu.

Baidu Joins Netsun to Launch "Business Advertisement s Union"

2007-07-17T18:16:00.000-07:00

Netsun, which operates the largest specialty industrial network, chemnet as well as texnet, and pharmnet in China, joined with Baidu to launch the "business advertisements Union".

The combination between one of the largest e-commerce network in China and the largest Chinese search engine is well received by industrial analysts in China.

It is also a cooperation between the largest domestic listed internet company and the biggest Nasdaq listed Chinese internet company.

Shanda courts inventors with Mercedes ride

2007-07-12T21:34:00.000-07:00

The fifth China Digital Entertainment Forum currently held in Shanghai. According to a report from Hexun's Wei Zhongkai, in the front gate of the exhibition, there are five brand new luxury Mercedes with doors wide open. Any entrepreneurs with ideas are welcomed to take a ride on the Mercedes to see executives at Shanda.

Shanda's CEO, Mr. Chen promised that any entertainment games with certain number of users and quality that meet Shanda's standard will be awarded 100 million yuan investment from Shanda. Yesterday, there were about 40 people took the rides but no final deals announced yet.

To attract talents, Shanda is also promoting it's "20% plan". The plan will award the core developer team 20% of profit from any new online games.

DCCI: Web Advertising to Reach 7.6 Billion Yuan in 2007

2007-07-08T23:44:00.000-07:00

July 9, Beijing

Under the guidance of Internet Society of China, DCCI (Data Center of the Chinese Internet) published market data of Chinese internet for the first half of 2007.

Major findings:

1. Internet market is prospering. During the first half, average monthly personal consumption reached 186 yuan and will be as high as 196 yuan at end of the year. Annual consumption will average 3,641 yuan. With increasing of about 20 million users annually, the yearly total consumption will double that of 2005. First half total consumption came in at 162 billion yuan. Second half total consumption expected to reach 202 billion yuan, more than the total amount recorded in the whole year of 2005.

2. Web advertising performed better than expected. Whole year advertising revenue will reach 7.6 billion yuan. The figure dose not include search advertising. First half online advertising revenue reached 3.27 billion yuan, similar to the total amount of 2005. Year over year growth expected to be about 53%. Previous expectation had been about 50%.

3. Search marketing grew rapidly with huge potential. First half revenue grew almost 73%. Total search market was 1.15 billion yuan and already higher than that of whole year of 2005. Second half revenue expected to take another jump of 35.6% over the first half. Network search advertising estimate to grow 45.8% over the first half and higher than the growth rate of keyword advertising.

4. Online video surpassed TV by 17% and becoming major source of video. The new DCCI data revealed that 77.95% users downloaded video from the internet comparing with 60.59% viewed them on TV.

5. Online video faces fierce competition with unsettled market position. The data surprisingly found that over 70% viewers willing to accept advertising as long as it does not interferes with viewing the videos. The most tolerable length is about 10 second-clips.

6. More challenge than growth is the changing landscape of online advertising. Video ads is already taking off due to innovations from key market players. Second half growth will be as high as 90.5%.

Baidu's Japanese Search Is Taking Off

2007-07-07T20:15:00.000-07:00

Only four months ago, 60% of Baidu's Japanese search engine users were actually from China and about one third of them were from Japan.

Today, that ratio has seen a dramatic turnaround. As eNet.com.cn reported, there are over 70% of the Baidu Japanese search engine users coming from Japan with less than 20% coming from China. However, traffic to the site is still only ranked about 517 in Japan.

The most welcome service is Baidu's image search with about 80% visitors which is far greater than the percentages from either Yahoo Japan, or Google Japan.

Yahoo Japan is still the far dominant search engine in Japan with 65% market share and Google Japan has roughly 25% market share.

Baidu Celebrates 2-yr Anniversary for Baidu Zhidao

2007-06-28T08:05:00.000-07:00

June 28, Beijing

Baidu celebrated the two-year anniversary for Baidu Zhidao ( Baidu Answers) in Beijing.

Robin Li, CEO of Baidu led the celebration. He indicated that, even Baidu was late to start the service, it has become the most popular answers service in the world.

According to a report by Chinese Search Behavior Research Institute which published at the event, there were 17,596,864 questions posted on Baidu Zhidao with 17,012,767 answered. The rate of problem solving is at astonishing rate of 96.7%. On daily average, there were over 10 million users visited the site, with 71,308 new questions presented and 223,907 new answers. Every question produced 3.14 (π?)user interactions.

Nobuyuki Idei Joins Baidu's Board

2007-06-26T07:25:00.000-07:00

June 26, Beijing - Former Chairman and CEO of Sony joined Baidu's board of directors.

The tremendous leadership and experiences of Mr. Nobuyuki Idei will be very valuable assets for Baidu especially in a time that Baidu is making a major push into the Japanese market.

Baidu Plans Online Payment System?

2007-06-20T21:19:00.000-07:00

Baidu's CFO, Shawn Wang made statements in London today, indicating Baidu's next ambitious move.

Wang told Xiaoxiang Morning News reporter Li Wei that Baidu is ready to move into the online e-commerce area. New e-commerce initiatives serving internet users and small and medium companies, such as online payment system, will be the next goldmine for Baidu's future growth.

Wang also denied that Baidu intended to move into Europe. In the near term, Baidu will only be focused on China and Japan.

Wang said that Baidu has no intention to split the stock. Today, Baidu's stock reached all time high, surpassing the "crazy high price" recorded on the day Baidu made it's IPO debut on Nasdaq. He indicated that there is no need for a stock split since the price of the stock has not hindered the trading activity with significant volumes.

Baidu has partnerships with Industrial and Commerce Bank of China as well as eBay's Paypal unit for online payment services. With the recent joining of Haoyu Sheng, who is the vice-president in charge of personal card business for the world's largest credit card company, American Express, the online payment system could be indeed a large goldmine for Baidu's future growth.

Baidu Continue to Dominate in Chinese Search

2007-06-18T14:56:00.000-07:00

June 18, iResearch just released new search report on Chinese search market for the first quarter of 2007.

Baidu continue to dominate with a market share 66.2%, nearly tripled that of second place Google which came in at 21.2%.

Third place Yahoo continue to shrink and it's market share fell to only 2.9%.

Google sees traffic jump in China

2007-06-11T23:08:00.000-07:00

According to Liu Jun, a vice president of research at Google.China, Google is seeing dramatic traffic pick up in China.

In the last six months, internet traffic in China has increased by 8% year over year. However, Google's traffic has increased by over 60%. "We are seeing it going up week by week" he said.

Google has hired about 100 software engineers and will hire many more in the coming months. One year ago, Google was still not very satisfied about the quality of it's Chinese search. "Our confidence level is much higher now", according to Liu.

He credited Google's gaining of market share to higher quality and fairness.

Reported by sina.technews

Separately, Google and Sina started partnership for search and search advertising yesterday.

Baidu falling behind Google?

2007-06-06T06:19:00.000-07:00

The famous web analyst Lu Bo Wang, who was behind the 2005 Chinese search engine market survey from state sponsored CNNIC, just released a new report.

The report is the result from a blind test of search results relevancy.

There are 2769 participants involved in 11,864 tests comparing two results from Baidu and Google, while the participants without knowledge of the identity of which search engine was used.

Among all participants, 48.2% favored Google's answers while 39.8% favored Baidu's answers. Additionally, 12.1% of the results were thought to be equally good.

News, entertainment, web and IT, business, online purchase, travel, science and education, government and public information are the eight areas queried.

Results relevancy, richness, and timeliness were being judged for preference.

Baidu only won by 5% in the entertainment area probably due to it's popular MP3 service. Google does not offer MP3 service in China yet.

Google won the rest seven areas. Some areas, such as travel, online purchasing, web and IT, and science and education, Google's lead were more than 10%.

In summary, Google's search quality is clearly above that of Baidu's though the lead was not overwhelming.

The figure shows graded test results. From B1 stands slightly favors Baidu to B3 strongly favors Baidu. And from G1 slightly favors Google to G3 strongly favors Google.

Lu quit CNNIC last year and started his own company China Intelliconsulting Corp or CIC. He indicated that to ensure the fairness of the test, the state sponsored Artificial Intelligence Lab in Qinghua University were inivited and participated in the survey.

Google getting aggressive in China

2007-06-03T18:55:00.000-07:00

Not long after releasing it's first version, Google has just updated pingyin input system for the fourth time in about as many weeks. The system is gaining significant traction with it's personalized selection of dictionary and many users reported getting good relevancy in results.

Perhaps learned from Baidu, Google acquired a small web navigation site, 265.com which is more like a web directory.

Three years ago, Baidu acquired hao123.com to boost it's traffic numbers before setting to go IPO in the Nasdaq. The 265.com is very similar comparing with the offerings of hao123.com. Several years ago, Yahoo also bought 3721.com which became a navigation site for Yahoo.China just recently.

Baidu hires Amex VP

2007-06-03T14:34:00.000-07:00

It is reported that Baidu had hired a vice president of the world's largest credit card company, American Express.

Shen Haoyu, a Shanghai native, is vice president of American Express in charge of personal credit card business.

To hire such high profile executive, may indicate Baidu's increased ambition of becoming a powerful search player outside of China to compete head on with Google.

It could also indicate Baidu's intention to get into the finance sector based on Shen's background. A payment system similar to Google Checkout will not only help Baidu in it's advertising business but also help the whole e-commerce sector in China and thus further boost Baidu's business.

Analysys CEO: Google taking Baidu's customers

2007-05-25T21:24:00.000-07:00

During the search engine conference in Xiamen, Fujian Province, Analysys International CEO Yu Yang told the audience that Google's channel partners are snatching many Baidu's customers in the secondary and lower level markets.

Yu Yang indicated that Google benefited by the resaler model they have developed in China. He said that from analysis of Baidu's earning report, the cost of direct sales is increasing rapidly.

Yu Yang thinks Baidu should using both direct and channel partners. Direct sales only strategy could result in significant problems in the future.

Reported by Liu Yang from tech.sina

Baidu's so called direct sale is quite different from Google's direct sale model in the United States. Here customers can sign on to Adwords themselves. Baidu's direct sale uses it's own sales force.

China, Yahoo! Yahoo China!

2007-05-16T21:04:00.000-07:00

If Yahoo.China goes down, where would you search?

The answer is China Yahoo!

That seems to be at least the answer Yahoo and Jack Ma are hoping for.

Yahoo.China has formally changed it's name to China Yahoo.

The name change concluded the integration of Yahoo.China into the Alibaba group.

The big question is, with Baidu leading, Google catching up, is there still a place for third place Yahoo?

Perhaps, Sougou will pass by pretty soon.

Google hates to google, Baidu loves to baidu

2007-05-13T22:02:00.000-07:00

Since Google is so popular, it has become a verb. However, Google fears the google word to become too common that it could hurt it's brand. So, Google lawyers had sent many letters out to the media reminding people not "to google" in not so noble ways.

Baidu seems to be seeing the opposite. Yesterday, many internet users in China have found out that Baidu had changed the "search" button on it's home page next to the search window to "to Baidu" or "Baidu Yixia" in Chinese, in fact make Baidu a verb itself.

Is Robin Li getting jealous about Google?

To be fair, Baidu has campaigned with "Baidu Yixia" quite successfully in the last few years.

Alibaba and the coming IPO

2007-05-05T14:04:00.000-07:00

The NEXT big IPO is coming from Alibaba.com, the famous Chinese internet e-commerce company.

Yun Ma(Jack Ma) is a Chinese internet legend. An English major but almost an IT illiterate, he envisioned that there was an opportunity for building a gateway between foreign buyers and Chinese suppliers. He founded Alibaba.com with one English website facilitating foreign buyers to find Chinese suppliers and Chinese suppliers to find foreign buyers. The Chinese website designed to help Chinese companies to trade between each other.

The idea soon turned out to be one of largest success stories in Chinese internet market.

According to Alibaba

Alibaba International (www.alibaba.com) is the world's largest online B2B marketplace for global trade. More than 500,000 people visit the site every day, most of them global buyers and importers looking to find and trade with sellers in China and other major manufacturing countries. Alibaba International has more than three million registered users from over 200 countries and territories.

Alibaba China (www.china.alibaba.com) is the largest Chinese language B2B marketplace for domestic China trade. With more than 16 million registered users, Alibaba China is a trusted online and offline community of SMEs who regularly meet, chat, search for products and do business.

History & Milestones:

1999	March: Alibaba.com is founded in Jack Ma's apartment in Hangzhou as an online B2B marketplace (18 employees)
1999-2000	Company raises US$25 million from Softbank, Goldman Sachs, Fidelity, and other institutions
2000	July: Alibaba.com honored by Forbes Magazine as "Best of the Web: B2B"
2001	December: Alibaba.com becomes the world's largest B2B e-commerce website with more than 1 million registered members
2002	December: Company further expands market leadership in China with its "Gold Supplier" product, a premium service that allows exporters to market their companies and products online
2003	November: Communication tool "Trade Manager" is launched, allowing buyers and sellers on Alibaba.com to communicate in real time
2004	October: Alibaba.com becomes the only import-export website to win Forbes "Best of the Web" award five years in a row
2005	October: Yahoo! Inc invests US$1billion in Alibaba Group and Alibaba Group acquires Yahoo! China. The strategic partnership allows both companies to leverage each other's brands and resources worldwide
2006	February: Alibaba.com launches trade show partnership program November: Alibaba.com appoints David Wei as President of Alibaba.com
2007	April: Alibaba.com launches its "Gold Supplier" product in Hong Kong - the first market outside of mainland China to be offered Alibaba.com's core premium service for exporters

A short, skinny figure, Ma is nothing but a heavyweight champ in Chinese internet market. Yahoo's $1 billion investment valued Alibaba group at over $3 billion dollars, now only second to the other phenomenal Chinese compay Baidu in value.

Ma' second act:

In May 2003, armed with success of Alibaba, Ma invested 450 million yuan and created the Chinese Ebay - Taobao.com. Later, a payment service, the Chinese Paypal - Alipay was also created.

Ma is also a Chinese "internet hero". After initial partnering with EachNet, Ebay formally entered China. But Ma is not a conventional person. He saw there was only a "live or die" scenario with Ebay. He decided to hit at Ebay hard. In October, 2005, Taobao announced that listing will be free for three consecutive years. On the same day, Ebay's stock price fell 7% on Nasdaq.

A year later, Ebay got out of China by folding Ebay/Each into Tom.com. However, how Taobao will be profitable is left a big question mark.

Ma' third act:

Beat Baidu is Ma's ambitious target after acquiring Yahoo.China.

Soon after the merger with Yahoo.China, Ma announced that Yahoo.China will surpass Baidu to become the largest Chinese search engine. He redesigned Yahoo Chinese site by imitating Baidu the way Baidu imitated Google. The "sou"(bad idea in Chinese) idea has been a disaster. Yahoo.China is on the way to disappearance.

In the last tweleve months, the "bigmouth" Ma has been unusually quiet. One only notable announcement from last month was the agreement to "buy or rent"Microsoft's business applications software on Alibaba.com. Ma thinks it will make using software be as easy as using water and electricity for the small companies in China. Bill Gates agreed.

It is rumored that alibaba either will list on Hongkong or New York stock market this year. Only Alibaba.com, one of the three branches under Alibaba group will be listed. Clearly, the missteps in the other two divisions, Taobao and Yahoo.China, make Alibaba.com the only attractive security to be IPOed. Ma has claimed repeatly that Alibaba was making "too much" money.

Whether Alibaba's IPO will have as much fanfare as Baidu's is remained to be seen.

It's the input, stupid!

2007-04-29T09:46:00.000-07:00

Google.China announced their newest update on their pinyin Chinese input system today. The version 1.0.17.0 makes input of Chinese characters into the search window even faster and easier.

It is the fourth update in just 25 days.

The controversy between Sohu and Google on Google's using part of Sogou's library is gradually dying down. The new input method is very well received with many users perceived it as better than Sogou's system.

As both hardware and software of computer systems improving rapidly in recent years, the lacking of a convenient Chinese input system has remained probably the biggest time limiting factor for internet users in China.

Baidu continues to stay away from adopting a new input system. But how much longer before it's too late?

We know the fortune of Google is due in large to the user's preference of searching a simple keyword rather than typing in a long url. Google's success is not just based on how relevant their results are but also on how quick the results come out since they take literally no time( a fraction of one second, almost every time).

Baidu must realize this dramatic change in user behavior and act fast.

Q1 Continues To See Search Marketing Surge

2007-04-29T00:39:00.000-07:00

Analysys International released Q1, 2007 search marketing data in the Chinese search engine market. Total marketing revenue reached 492 million yuan, up from 476 million yuan from Q4, last year.

Baidu continue to dominant the market with 57% market share and 4% quarter over quarter growth. (last quarter was 58%)

Google also saw rapid growth with 13% quarter over quarter growth and increased it's market share to 18.7% and further distanced itself from third place Yahoo which came in at 13.6%.

Badiu reported a so so quarter, stock jump after hours

2007-04-26T21:50:00.000-07:00

Baidu reported a so so quarter, though earning was more than doubled.

Here is revenue growth table for the last six quarters:

	Q4/05	Q1/06	Q2/06	Q3/06	Q4/06	Q1/07	Q2/07
	14.2	16.9	24	30.3	34.8	35.7	49.98
Y/Y	172%	197%	175%	169%	136%	103%	Est
Q/Q	29%	18%	41%	25%	15%	2.60%

In the after hours trade, Baidu's stock jumped by about 20% from closing price.

The revenue growth nearly stopped in the latest quarter. Sequential customer addtion was a miserable 3.7% comparing with 5.9% increase from previous quarter.

Brain drains continues after CTO and PR chief, both credited with the Baidu's rise to dominance in Chinese internet market, left the company, COO David Zhu announced decision to leave.

Google is sweeping up the largest Chinese carriers.

Baidu's Japanese operation is nearly grounded at start.

With many cracks appearing in Baidu's fundamentals, why the stock jumped in the after hour trade?

Clearly, investors were heartened by the last item in the table, the projected 40% revenue jump quarter over quarter.

Why Baidu is so confidently projecting such a huge jump in sequential growth? The answer is likely one word: Olympic

In the last month, there are dramatically increased display ads on almost all Baidu properties. The most promised land is now the Baidu News. Though no statistics available in these areas, it is likely that Baidu News is the dominant destination for Chinses internet users. Unlike the ads free Google News, Baidu News shows both display and contextual ads.

My guess is that several Baidu top properties are already overbooked for display ads that came from many large multinationals who are ready for the 2008 Olympic in Beijing. Many travel related businesses are probably ready to tip in too.

A recent quote from a Google rep indicated that Google's China revenue is in tripling pace. The super hot Chinese economy is what really helping Baidu. As a Chinese saying: Rising water lifts the boats.

If Robin Li's team work more deligently and more focused on the Chinese market, with a domestic IPO to raise necessary capital for expansion, the Olympic games in 2008 could make Baidu a real star in the huge Chinese internet market.

Google's Carrier Deals Post Challenge to Baidu

2007-04-25T18:15:00.000-07:00

After signing up China Mobile, China Netcom, Google struck another deal with China Telecom.

Both the largest mobile and the largest landline carries are now partnering with Google, the threats it poses to Baidu is looming large. A quarter or two later, the market share data could be tipping in Google's favor.

Rather than focusing on dealing with the challenge of Google, Baidu seems to be claiming victory by invading the highly competitive Japanese market.

It looks like a very long road ahead of Robin Li and his team less CTO Liu and PR boss Liang.

Sohu scored a big coup, Google the winner

2007-04-08T23:23:00.000-07:00

Last week, Google released it's Chinese pingying input application which speeds up Chinese entry using standard western English keyboards.

A big controversy erupted immediately with some internet users pointed out the similarity between Google's input system and Sogou's innovative input system. Sogou is Sohu's Chinese search engine.

Some internet post indicated one of Sogou's earlier version had a bug that Sogou later corrected but reappeared in Google's input system. Some also claimed Sogou engineers have intentionally left digital "finger print" in their dictionary and that unlikely coincidence proved Google has in fact copied Sohu's dictionary.

Initially, Google China remained silent for a few days. Sohu must felt a golden opportunity might have slipped away. It can no longer keep quiet. Sohu formally asked Google to stop using it's input system with a threat to sue Google.

Today, Google formally apologized and updated it's input system to rid of the similar mistakes that have appeared in Sogou's input system.

More than two years, Charles Zhang, CEO of Sohu claimed it only took one year for Sogou to overtake Baidu to become the leading Chinese search engine. Time has gone fast and Sogou is working hard to stay even relevant. Sogou's fate has been in quite a parallel like that of the Live Search after Bill Gates and Steve Ballmer vowed to kill Google in six month, or perhaps in a year.

It's easy to see the controversy was no doubt started with the help of Sogou if not somebody directly from Sogou due to the mention of the digital "finger print".

Now Sogou scored a major coup. From now on, there are only two search engines have easy Chinese pingying input system. Sogou the pioneer, and Google the follower. Especially Sogou is leading the fight against Google, not Baidu.

However, the real winner will be Google.

The reasons are: First, this whole controversy is better than anything as a major breaking news that attracts Chinese users to try the Google input system. A Google announcement cannot even imagine to achive this level of publicity.

Secondly, Google did a first, that is to apoligize to a competitor in China. There has been so many dirty fights among Chinese internet players in the last few years. Charles Zhang has been upfront throwing punches onto almost everyone else. Google has not only updated dictionary in two days but also improved it's public image instead.

Now, let's look back at the whole issue. Was Google guilty?

Perhaps Google engineers were lazy, perhaps they were rushing out their system so they copies part of Sogou's dictionary.

Let's look more carefully at the evident "bug" that was in Sogou's dictionary and widely reported as true proof.

"Fenggong" is a famous comedian in China. Sogou's system initially spelled it as "Pinggong" but later corrected it. The initial release of Google's sytem still spelled it as "Pinggong", so Google was caught.

Let's not judge whether Chinese dictionary should be proprietary to a company or not, what we know is that both Sogou's system and Google's system are based statistically on frequencies of word appearances in internet data that they indexed independently and both are likely extensions of "Google Suggest".

The strong evidence of the "bug" seems quite strong to the whole world. However, it's somehow laughable to many Chinese since the comedian's Chinese name can be spelled either as Feng or Ping known as "equivacal word" in English. Perhaps there are many Chinese misspelled his name as "Pinggong" and that misspelling was indexed by both Sogou and Google's crawlers. Can Sogou prove here that the "misspelling" is proprietary to a Sohu engineer?

While since Google admitted to have used other people's dictionary source in its apology to Chinese users and Sohu, no need to defend Google here.

But, Google perhaps has done a great public relationship stunt here. With more people trying out the new input system, they will addict to it and by word of mouth again, Google might just found out a break through point to gain ground on Baidu significantly.

Baidu, beware!

Baidu's migration from Yahoo to Google

2007-04-06T17:14:00.000-07:00

Zhang Xianbao published an interesting article on Baidu's success story on his iResearch column. In his article, there are interesting images on Baidu's home page evolution:

Here is Baidu in 2001, pretty much like a home page to an average tech company:

Here in 2002, Baidu is becoming China's Yahoo:

By 2003, Baidu changed it's look and probably it's mind too. Baidu wanted to become China's Google:

By 2005, Baidu found out, to become China's Google, you gotta be looking exactly like the one!

Good Job, Baidu!

Thanks to Xianbao.

Baidu and Google Gained in 06

2007-03-26T22:17:00.000-07:00

From iResearch: Baidu and Google gained in Chinese search market in 06

Total search market reached 1.39 billion yuan in 06 in the Chinese search market. It was up 47% over 2005.

Baidu's share reached 55.2% and replaced Yahoo as number one player in the search market. Google also moved up to number two position with 21.7%. Yahoo has fallen to a distant number three with only 7.2% market share. Baidu had a very strong second half which helped move it up to the top position.

After formally entering the Chinese market in 2005, Google has gained market position year after year. It's market share has moved up from only 2.1% in 2003 to 21.7% last year. It's ranking also moved from number five in 2003, to number three in 2005, and number two in 2006.

Reference in Chinese

Baidu is Googling no more?

2007-03-26T19:27:00.000-07:00

In the past, Baidu has done a wonderful job at imitating Google.

Great Chinese search and clean Google-like home page has jump started Baidu and made it a superstar in the world of search.

Now, for the money, seems Baidu is abandoning what it's been doing great. At a time, when Google is reducing amount of ads in exchange for better user experience, Baidu is putting ads on its image search home page.

Frankly, I don't think Baidu is heading the right direction.

March Madness: Amazon kills Microsoft Live

2007-03-17T22:53:00.000-07:00

Breaking News: Amazon ditches Microsoft Live

In a shocking turn of event, Amazon has ditched Microsoft Live search and switched back to Google as A9's search provider.

Amazon has been the only major adopter of Microsoft's Live Search.

Search on Amazon's A9 now showing results "enhanced by google".

Now, Baidu is the other lonely Microsoft search partner. Wait a minute, it is the other way around. Baidu search results are being displaced on MSN search in Chinese :)

What is Baidu thinking?

2007-01-31T19:37:00.000-08:00

According to Sohu news, Baidu is suing a former employee(executive) for trade secret violation after he jumped ship to Google.China.

This makes me wonder, does Baidu ever searched:

1. Kai-Fu Lee

2. Vic Gundotra

? ? ?

Q4 search marketing revenue reaches 476 million

2007-01-29T21:22:00.000-08:00

According to just released data from Analysys International, total revenue from search engines and their affiliated programs reached 476 million yuan in China.

This is a 14.4% quarter over quarter growth from third quarter's 416 million yuan which is slightly higher than third quarter's 10.5% growth rate.

Baidu continues to gain market share though at slower pace of 16%. Google surpassed Yahoo to the number two position with 19% Q/Q growth rate.

Due to reorganization and missteps, Yahoo's revenue actually dropped from Q3.

2006 was a good year

2007-01-16T18:51:00.000-08:00

According to just released data from Analysys International, 2006 was a wonderful year for search marketing.

Total revenue reached 1.57 billion yuan. Quarterly data were: Q1-300 million; Q2-380 million; Q3-420 million; Q4-470 million yuan.

Yahoo has dropped off from number one two years ago.

Google came in second with 16% market share.

Baidu has come to dominance with a commanding 53% market share.

If Analysys International's data an accurate prediction, Baidu's Q4 will came in roughly 34.8 million dollars. On the other hand, It is entirely possible that Analysys International may have taken that figure from analysts' projection for Baidu's Q4.

Sleeping with the enemy, EMI married Baidu for money

2007-01-16T18:47:00.000-08:00

After sued Baidu, EMI is bending over, and married Baidu for money.

Baidu inks deal with EMI

More data shows Baidu's dominance

2006-12-21T00:04:00.000-08:00

The new data is from 50bang.com

Baidu and Microsoft Annouced Joint Search Marketing

2006-12-13T23:18:00.000-08:00

Dec 14 - Baidu and Microsoft announced today they will start joint search marketing services by the end of the month.

Following the agreement, MSN, Live and other Microsoft and it's partner sites will carry Baidu's Chinese paid search ranking services.

From news.ccidnet

iResearch Release October Market Share Data

2006-12-13T22:40:00.000-08:00

Dec 14 - iResearch formally published iUserTracker and have recruited over 20 thousand web users. The users installed iUserTracker and having their search behaviors followed by iResearch in exchange for a fee.

After screening and analysis, iResearch announced their survey yesterday.

Coverage of search engine: In October, 2006, there were 99.7 million people in China used search engine from home and at work. Baidu led by 88.4% and followed by Google with 53.0%. Yahoo ranked third at 35.0%.

In the month of October, Chinese made 3.01 billion visits to search engine sites. Baidu led by 63.7% of market share. Google.com and Google.cn combined with 19.2%.

From July to October, Baidu's share gained steadly from 60.1% to 63.7%. Google's shares were virtually flat at 19%. The rest all have lost shares more or less.

From August to October, 2006, Chinese made 13.469 billion keyword queries. Baidu's leading was even more significant at 69%. Google came in at only 14% and lower than it's search market share of 19%. One explanation given here is that Chinese users are search more keywords now from each search engine visit.

From news.ccidnet

Not so new news

2006-12-07T22:21:00.000-08:00

Google.China announced that their co-ceo Mr. Chou will leave Google.China by the end of this year.
Mr. Chou joined Google.China to help co-ceo Kai-Fu Lee to run the business side of the China operation for Google. In contract, he has outlasted Yahoo's China operation Chief Mr. Xie who resigned in just one month on that post.

Rumor has been running for month about the departure. Reason for both cases said to be alike in that their plans were overruled by each of their respective US head.

Google said the position would NOT be filled soon.

Baidu continues to gain market share

2006-11-23T23:56:00.000-08:00

According to data released today by Analysys, search engine market in China reached 416 million yuan in the third quarter, up 10.67% from last quarter.

Baidu continues it's strong leadership with revenue of 237 million yuan, surpassing the sum of Google, Yahoo, and the others. It was a 25% jump from last quarter, though at slower pace than the second quarter when Baidu had a 41% jump in revenues.

Google's revenue reached 68 million yuan, up 11% from last quarter's 61 million. Yahoo did not do well, with revenue falling to 54 million from 59 million yuan last quarter.

Baidu Analysis from Analysys

2006-11-07T22:55:00.000-08:00

Analysys, the famous internet consulting firm in China issued an analysis of Baidu today titled "Baidu needs to transform their traffic and the "targeting" of that traffic to capability of monetization".

Baidu just issued unaudited financial result for the third quarter, ending Sept. 30, 2006. The report shows Baidu's third quarter revenue totaled $30.3 million, increasing 24.9% quarter over quarter and 169.1% over same period last year. Net income came in at $10.8 million, increasing 45.8% over last quarter and 902.5% over same period of last year.

Analysys's Analysis:

(Note: Row 1-search marketing revenue; Row 2-Q/Q growth rate; Row 3-ratio in total revenue;
Row 4 year/year growth rate; The rest data are from other income which are much less significant.)

Baidu's total revenue for the quarter reached 229.3 million yuan, increasing 24.89% quarter over quarter, and 169.1% year over year. After Baidu cut it's ERP software division, the percentage of search marketing revenue reached 99.29% of total revenue 237 million yuan.(Note: Analysys switched the two numbers probably by mistake).

Analysys thinks the following three events are worthy to watch carefully:

1. Baidu introduced some improvement in search ranking since Sept. 11 by adding "composite ranking index". Analysys thinks, most questions posted by customers are focused on "invalid clicks" and the implication on higher payment. Since the basic question is the justification of the result of search marketing, the "composite ranking index" does not remove all the doubts from customers. It may affect the degree of satisfaction for a couple of quarters, especially those websites heavily dependent on search engine for their online sales. That could impact Baidu's revenue.

2. During the third quarter, 2006, Baidu replaced channel resellers in Beijing region with direct sales force to strengthen competitiveness in the critical regions. Baidu's active customers reached 102,000, increasing 91.73% year over year. The growth rate slowed. Average consumption per customer increased 11.1% to reach 2,330 yuan. Analysys thinks the direct sales strategy in the largest cities such as Beijing and Shanghai is for increasing penetration in the big advertisers. The transformation from channel partners to direct sales will certainly increase the satisfaction of customers. However, the direct sales force needs time for the transformation and follow up on customers, the number of active customers could be impacted.

(note, Row 1- number of active customers in thousand; Row 2-Q/Q growth rate; Row 3-year/year growth rate; Row 4- ARPU in Yuan; Row 5-Q/Q; Row 6-year/year; Row 7-accumulated number of customers; Row 8-ration of active customer/total customer)

3. Baidu announced in the quarter, that they have formed alliance with Viacom's MTV unit. A new MTV special zone will be placed inside Baidu's video search. Four of Viacom's Chinese partners will also join the service. Viacom will supply the original contents and Baidu will provide the platform and communication channel. Users will be able to watch the shows free or pay a fee to download. The monetization will mainly come from advertising. Analysys thinks the collaboration should be further expanded to internet blogs and personal web pages to explore the market opportunities in personal purchasing and short term consumption of videos. To expand monetization, Baidu needs to further improve functionality and service.

Analysys opinion

Analysys thinks, the "over exploration" on search marketing has led to the increased ratio of inactive customers. Baidu must look for new source of revenue besides improving services and cultivating the market. Analysys thinks, due to the conservative "follower" strategy in expanding new business opportunities, Baidu has lost significant chances in areas of new web applications, mobile value-added services. Baidu needs to transform their traffic and the "targeting" of the traffic to capability of monetization.

Another Yahoo? or still China's Google?

2006-10-31T22:36:00.000-08:00

Baidu reported third quarter earnings today.

It was fantastic: 180% increase in revenue, 10 fold increase in profit.

No one can ask more, can we?

Frankly, we are quite disappointed. This quarter supposed to be a strong build up from last quarter with strong momentum in many fronts, especially continued market share gain and the release of new community based products.

However, as we suspected, Baidu's decision to replace channel partners with it's own sales force could have negatively impacted business in the quarter. Active online customers increased only by 13.3%. Many of these partners might have shifted their energy to work for Google.

For the next quarter, the projection is merely 15% increase quarter over quarter. We have expected Baidu's business to take off instead of maturing at this early stage.

Baidu has been heavily tauted as China's Google. We have to respectfully disagree. It looks more and more like another Yahoo.

Google has long realized that click through rate is more important than keyword pricing and have improved their ads ranking based on relevancy and likelihood of being clicked by users. Yahoo was late to do similar and being punished last quarter. Baidu is still doing the old "overture" way in disregard of user experiences.

Last quarter, Baidu had 40% quarter over quarter growth. Google had probably 70% quarter over quarter growth in China(estimated by last survey). When the new survey coming out, it's likely to show that Google probably continues to gain market share in search revenues thanks to Baidu's strain relationship with channel partners.

Again, longer term, it is hard to see how Baidu can compete with Google on capex front. Effort in capital expansion is much needed for Baidu sooner rather than later.

Baidu to report earnings

2006-10-29T11:53:00.000-08:00

Baidu will announce 3rd quarter earnings after market close on Tuesday.

A webcast will be held at 8pm US eastern time.

We expect Baidu will have another excellent quarter.

Revenue should grow 35 to 40% this quarter over last quarter which is about 2 to 3 million higher than Baidu's guidance of about $31 million dollars.

A few things contributed to higher revenues this quarter:

1. Continue market share gains
2. Significant increase of display ads across the two most significant properties of post.baidu and mp3.baidu
3. Continue strength in keyword pricing

One uncertain factor might have affected result is the replacement of channel partners with Baidu's own salesforce mainly in Beijing area. It definitely helps Baidu in expandng revenue in northern China regions but a strain relationship with channel partners could negatively impact revenue growth in other regions as those partners were heavily courted by Google at the same time.

Other positive developments during the quarter includes rollout of hi.baidu, a blog service and several partner agreements including the distribution agreement with Viacom's MTV.

There are also several negative development during the quarter:

1. Layoff of enterprise software division employees. The event was covered heavily and expanded by Baidu's competitors. To Baidu's end, it was done less appropriately and Baidu now decides to sue one of the former employee for defamation which we think is very unwise.

2. CTO resignation. The reason of Mr. Liu's resignation was quoted as "strong desire for starting a new business". Translation - I don't like my boss and want to be my own boss.

3. Over monetization concerns. Many search result pages have whole page of sponsored links when Baidu thinks a user was looking for a product. In near term, since many Chinese users could not differentiate a sponsored link from a natural result, Baidu can profit handsomely. Longer term, it degrade Baidu's user experience and could open up opportunities for Google to regain market shares.

There are also several challenges facing Baidu:

1. Capex. With very limited financial resources, how Baidu can compete with Google long term is a big question. Baidu should consider listing in domestic market as a source for more capitals.

2. Missiong links such as email program. Email is probably one of the most sticking application of all web applications. Baidu should consider taking over Netease which owns one of the most widely used email program.

3. Missing English contents. Though there are growing (but still very limited) English contents in Baidu, a joint venture or collaboration with a English search engine could give Baidu much needed boost since many academic users in China are using Google as their second choice of search engine. Once Google's China division starts to deliver localized content with their recently hired one hundred talented Chinese engineers, many could decide to stay with Google for searches in both languges.

Google Penalized Alibaba

2006-10-23T19:50:00.000-07:00

Update. Rankings of some subdomains and webpages from Alibaba were lowered by Google recently. Google search is no longer "Alibaba inside".

Before Google, Baidu has penalized Alibaba. This time, Google used different degree and means by lowering ranks of some of Alibaba's domains and their pages. For example, search.china.alibaba and hotproduct-cn.alibaba.com used to be the best performing search rankings and now lowered by Google. Previously, Baidu removed these two subdomains from their search result.

After lowering the ranks, though still indexed by Google, they are no longer ranking well in search results. For example, if you search some keyword such as "y-style filter", you can no longer find Alibaba's result in the first page. Previously, Alibaba was absolutely always number one.

Reasonable explanation from seo field is that those sub domains are placed in Sandbox. For major website like Alibaba, it is unlikely the adjustments have been done by machine. Connecting with the crazy fact that tens of thousands of Alibaba pages are clogging almost 30% of Google's first page results, human involvement from Google is more likely.

A few days ago, the author has questioned some of the SEO work of Alibaba's pages: "Such search quality has severely affected user experience, and threatening normal use and survival of search engines. It is not the question whether because Alibaba's CTO was from Yahoo and very skilled in search technology or because they are often crossing the lines. It is the question how long Google can tolerate this situation".

Now, facts proved once again, there is limit how much Google will tolerate. "Any behavior that severely affects user search experience and normal use and survival of search engine will ultimate be abandon or punished". This event should be a big warning for many large scale websites.

by Shitou

Baidu builds 4th generation search engine

2006-10-20T20:50:00.000-07:00

The hugely successful 3rd generation search engine Baidu, is actively building 4th generation search technology, revealed by it's CEO Robin Li yesterday. Baidu is actively exploring social search to meet the internet's need for next generation search technology, that is social search.

Li indicated that, in the next few years, the trend of socialized search will be more and more predominant. Internet search has gone three stages, the first one based on appearing frequencies of keywords; the second one using "super link analysis" technology and the third stage is dominated by sponsored search ranking and it is where Baidu is positioned currently.

As the need of information surges, there is increasing demand for user involvement. Socialization is the best way to meet this demand. Baidu is actively pursue the idea and development. The announced products of post.baidu, baike.baidu, and hi.baidu are the testing ground for this developing trend of communities. Baidu is increasing it's commitment in this area to maintain it's leadership position in the industry.

from news.163.com

Keyword Pricing Updates(8)

2006-10-17T21:02:00.000-07:00

On Oct. 17 , Huatong 140 Index came in at 5.7411. It is up another 14% from two month ago when last survey was done on Aug. 15.

It was up more than 25% from the first survey done on June 6.

Breaking News: Baidu Signs with Viacom

2006-10-17T00:09:00.000-07:00

Sept. 17 Breaking News

Baidu has just signed strategic agreement with Viacom and four largest Chinese music labeling companies this afternoon.

Baidu will establish close relationship with Viacom's MTV music network.

reported by tech.qq.com

Breaking News: Baidu Signs with Viacom

2006-10-17T00:04:00.000-07:00

No more song to sing, Guge?

2006-09-27T23:30:00.000-07:00

Only one week after a CIC survey, many web surfers in China found out today there was Guge no more!

The very familiar but less welcomed Google.cn has changed it's logo from Google.谷歌(Guge) back to the original one Google.中国(China)

Has Google given up Guge or just a technical glitch?

Chinese Webmasters Prefer Google and Baidu

2006-09-20T22:15:00.000-07:00

According to the Sina.tech report, 55.8% of Chinese webmasters chose Google Adsense, while 45% of them chose Baidu Union for advertising partnership.

None of the others came in more than 9%.

It is also worthy to note that 18% of webmasters have not used any advertising partnership yet.

CNNIC Survey

2006-09-14T21:12:00.000-07:00

Almost at the same time, China Internet Network Information Center (CNNIC) also released 2006 survey of search engine use in China.

CIC's founder Bowang(Peter) Lu was the main architech for CNNIC survey. The similarities between the two surveys are thus expected. However, consider the resource and official name brand of CNNIC, the new CNNIC report may be more credible.

CIC is a private company and only founded recently by Bowan Lu and the CIC report was undoubtly rushed out to compete with CNNIC report. Anyway, a first research report from a new consulting company lacks the continuation of the CNNIC report

Following are main points from the CNNIC report:

1. Brand name recognition, Baidu 86.5%; Google 64%; Yahoo 38.5%; Sogou(Sohu) 36%; iAsk(Sina) 15%.

2. Among search engines within users' top three choice, Baidu 84.6%(12.8%+); Google 57.5%(2.5%+); Yahoo 23.6%(3.8%+); Sogou 18.3% (5.7%+). All four search engines saw increased usage among users. That is to say, 84.6% of all users are using Baidu more or less and 57.5% of all users are using Google more or less.

3. Among first choice search engines, Baidu continue to gain at 62.1%(14.2%+); Google's share at 25.3%, lost 8%; Yahoo at 4.8%; Sogou at 3.2%; iAsk at 1.2%.
Between cities, Beijing users continue to favor Baidu, while Shanghai users continue to favor Google.
Comments: Beijing has more students, Shanghai has more businessmen; Beijing users are more proud of being Chinese, Shanghai users likes to make more mony may contribute to their choices of search engines.

4. Among all users, multiple search engines users are 76.3%. Google led as second choice at 37.8%, Baidu 26.9%. None of the search engines alone satisfies users.
Comments: There are some discrepancy in this category and category 3. If you combine first choice with second choice, Baidu would come in at 89% and Google come in at 63.1%. The numbers are even bigger than top three choices combined. The data may have some overlap here.

5. High end users (same definition as in CIC report), 46.5% still choose Google, 39.4% choose Baidu.
Comments: This data differs from CIC report which indicated Baidu also beat Google at high end user base.

6. Yahoo users' loyalty saw biggest increase(by definition of users who have not switched their first choice)
Comments: Yahoo should not be any happier here since only a few die-hard(4.8%) left for using Yahoo as first choice.

7. Though many addtional functions are provided by search engines, 72.8% of users are using their first choice only for search function.

In this category, Baidu 70.5%; Google 77.8%; Yahoo 60.5%; Sogou 80.8%.

8. Among search styles, main page used 76.7%; address window used 31%, toolbar used 14.4%. Also 57% users only use search engine main page for search.

9. Among users, only 16.8% of them heard about sponsored search but do not understand the details. As low as 11.6% of them understand the details. More surprising, only 5.1% of users can tell the difference of natural search results and sponsored results.

10. Student led Baidu users at 48.2%. Enterprise users led Google users at 48.5%.

11. 52.7% of users younger than 23 chose Baidu while 19.7% of them chose Sogou, thus make Sogou the most "mature" search engine.
Comments: this is maybe another wrong conclusion since Sogou's user base is also much smaller.

12. Part of reasons of choosing Baidu is the convenient spelling of it's Chinese name.

13. Almost 80% of users do not receive Google's Chinese name Guge well.

14. Users' search engine dependency rated 3.94, but satisfaction only rated 3.69

15. High dependency on search. Among all users, 44.1% of them search multiple times while online

16. 32% of users searched for private data and 29% of those 32% found something. This indicates 9% of users are risking losing privacy online. This category was added to the new survey after the news of AOL private data exposure.

17. two-thirds of users do not want search engines to keep their search records.

18. Complete with Accuracy; habit; and speed are the top three reasons for choosing a search engine.

19. Baidu's bulletin board, Yahoo, Sina, and Sohu's free emails are important factors for user attraction.

End.

Comments: CNNIC's report looks more thorough but much less rosy for Baidu/gloomy for Google than the CIC report.
Addtionally, CNNIC's sample size is almost four times larger than CIC's sample size (4500 vs 1200) also make CNNIC's report more reliable.

Google vs Baidu - The New CIC Survey

2006-09-13T20:26:00.000-07:00

The new company founded by the famous Chinese internet analyst Bowang Lu (former name Weigang Lu), CIC, published it's first research report for Chinese search engine survey. The report highlighted the fact that Google's market share has fallen 12.3% in the last year.

Following are parts of the report:

Definition for search engine market share: Method 1, we continue to use first choice to decide market share; Method 2, when a user uses more than one search engine, a weighted percentage was used as modification for method 1; Method 3, we use which search engine the user was using on a random day of being interviewed and the frequency the user uses that search engine for market share definition.

Fig 1. Among all users, 42.6% are students and teachers, 15.0% are from government offices, 25.9% are enterprise users, 16.5% are from others.

Among school users, 77.1% use Baidu, 13.4% use Google
Among office users, 54.3% use Baidu, 29% use Google
Among enterprise users, 64.7% use Baidu, 31.0% use Google
For all users, 64.7% uses Baidu, 20.7% use Google

(Due to fact that all the other search engines have share in single digit, their numbers are not being translated here)

Fig 2. Among all enterprise users, 29.8% from government owned firms, 42.9% from private firms, 21.0% from foreign capital invested firms, and 6.3% from others.

Among users from government owned firms, Baidu's share was 54.7%, Google 25.0%
Among users from private owned firms, Baidu's share was 54.0%, Google 32.8%
Among foreign capital invested firms, Baidu's share was 44.8%, Google 44%
For all enterprise users, Baidu's shae was 52.7%, Google 32.0%.

Fig 3. High end user are defined as those non-student users who are also aged 25 and above(77.4%), with college degrees(53.0%), and earns monthly salary higher than 3000 yuan(55.4%). The percentage of those met all the high-end criterions was 34.1% among all users.

Fig 4. Among all high-end users, Baidu took the largest piece of the pie at 45.1%, Google 43.7%

Fig 5. Search engine dependency. All users are asked to rate the importance of using a search engine, with 5=most, and 1=least

All users, 4.04; Baidu users, 4.05; Google users, 4.23; Baidu/Google dual users, 4.19; Google/Baidu dual users 4.29

Single search engine users, 3.94; multiple search engines users, 4.13

Fig 6. User satisfaction

All users, Baidu 4.09; Google 4.06
Student users, Baidu 4.20; Google 4.02
Non-student users, Baidu 4.02; Google 4.09

Fig 7. User satisfaction categories for their first choice search engine

1. landing speed, Baidu higher
2. website stability, Baidu higher
3. search result relevancy, Google much higher
4. search result justification, Google higher
5. business culture and conduct, Google higher
6. technology innovations, Google much higher
7. overall impression, Google higher

Fig 8, Cross comments regarding their second choice search engine

Blue comments are views on Baidu from Google/Baidu dual users
Red comments are views on Google from Baidu/Google dual users

(the figures are pretty much fit those from Fig 7 except that Baidu-preferred users are less impressed by Google's search result relevancy and technological innovations)

Fig 9. Baidu improvements:

1. Maturing into an overall service of search

In 2005 CNNIC survey, 49.1% Baidu users searched for the web, 55.8% searched for MP3
61.7% Google users searched for the web, 17.3% search for MP3

In this year's CIC survey, 72.6% Baidu users searched for the web, 55.5% search for MP3
76.9% Google users searched for the web, 11.9% searched for MP3

(Google does not provide specialized MP3 search service like the one Baidu provides)

Fig 10. Baidu's improvements:

2. Baidu's MP3 gained rock solid leadership at 85.1%

Fig 11. Baidu's improvements:

3. Market share increased from both student and non-student users; Started to captured Google's core users and shaking Google's position in high-end user market

Fig 12. Google's core users

Google users are still carry the social marks of higher education level and higher income, but some are migrating to Baidu and could be serious challenge for Google.

However, the satisfaction level and regards of technology innovations still make Google way ahead of Baidu.

Google's users' overall internet experience, search engine dependency, job related searches are all way ahead of Baidu users.

Fig 13. Google vs Baidu

users access net earlier than 2000, Baidu 42.5%; Google 67.1%
users access net earlier than 2002, Baidu 39.3%; Google 58.9%
users installed and using toolbar, Baidu 35.6%; Google 50.6%

Purposes of using search engine:
Study related searches, Baidu 34.8%; Google 45.3%
Professional related searches, Baidu 64.5%; Google 83.3%
Leisure related searches, Baidu 76.7%; Google 70.9%
Living and health related searches, Baidu 44.7%; Google 52.2%

Fig 14. Beijing residents most frequently visited websites

For first landing choice:
Sina still leads at number 1. Baidu replaced Sohu at number 2. Sohu number 3. Netease number 4.
Yahoo.China and Google tied at number 5.

For most frequently visited:
1. Sina; 2. Sohu; 3. Baidu; 4. Netease; 5. Yahoo; 6. Google

Which site visited yesterday:
1. Sina; 2. Baidu; 3. Sohu; 4. Netease; 5. Yahoo; 6. Google

translated from Chinese source: it.sohu.com

Challenges Facing Baidu Search Engine

2006-09-10T23:41:00.000-07:00

1. Baidu is moving towards direct sales. It inevitably cause strain relationship with channel partners. At the same time, Google's entering will certainly expand their channel relationship and expand it's sales force. Some channel partners will turn to embrace Google. This is the first major threat that is challenging Baidu. Above that, more and more Chinese firms are looking at the international market. Google's English search in too powerful for Baidu to match. Though Google's pagerank technology make Google's search quality above that of Baidu's, it's Chinese phrasing technology is still far behind Baidu's. So, there is long way to go for Google to dominant Chinese market and it won't shake Baiud's position in some time.

2. The combination of Yahoo.China and Alibaba have not shown any impact to the Chinese search market. Many of us don't think Yahoo.China will become a threat to Baidu. However, it is unpredictable wheather storms are brewing under the quiet surface. The tight contrl of small enterprises in China by Alibaba, the future trend of e-commerce, Jack Ma's envision of commerce search, as well as the left over influence from 3721 could all combined to form formidable challenge to Baidu. The bottom line is businesses want to see the effect of their advertising spending. The e-commerce portals are perhaps closer to their targeted customers. We'll have to see whether these factors will turn to Alibaba's advantages. It was just known that
Jack Ma intended not to develop further the business of 3721. In yesterday's interview with First Business Daily, Ma admitted for the first time, there was basically no growth after "Ya/Ba" merger. Due to exodus of talents of 3721, Yahoo.China has been very weak or even barely surviving. Ma indicated he would make decison soon on 3721's domain business. So, Yahoo.China will probably not going to pose threat to Baidu in a short term.

3. Sogou's fierce competition is also threatening Baidu. Sogou is trying to boost R&D, and increase index size to surpass that of Baidu. A sudden change in users' taste could give Sogou a chance to surpass Baidu. Sougou is also trying to take advantage of Baidu's poor PR in handling recent layoff of ERP software division. Comparing with Google, Sougou knows more about China. The recent innovative Chinese input system is a perfect showing of Sohu's ambition to be the king of China's search market. However, the new method still requires lots of polishment. Any misstep in small details could ruin their empire. The hardest thing might be how Sougou can achieve the task of changing users' search habit.

4. MSN, supported by Microsoft's operating system, could easily be bundled just like the Internet Explorer. It is clearly a threat to Baidu. Remember 3721 started by software bundling deals. MSN could integrate search with operating system to make it ease and convenient and pose challenges to Baidu.

5. Finally, let's see which one pose the biggest threat to Baidu. In my opinion, none of the above. The biggest threat is actually the not so celebrated SOSO from Tencent. Because Tencent controls the largest group of Chinese internet users, they must be able to figure out a way to make them used to search SOSO. Unfortunately, Tencent's SOSO does not have their own core technology. Their current search results are using Google's. The situation may have been caused by Tencent's neglegiance of search market from the begining. The major reason is that Tencent does not focus on search but Baidu does. Even SOSO has the biggest potential challenging force, from strategic point of view, it is unlikely to shake Baidu's superpower in the Chinese search market.

by Wang Yifei from TNTBBS.com