BAIDU, ROBIN LI AND SEARCH ENGINES IN CHINA

BAIDU.COM

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Baidu office of DoubanBaidu is a tech company specializing in search and web services and artificial intelligence. Based in Beijing and listed on Nasdaq, it is one of the largest AI and internet companies in the world.

Baidu was founded in 2000 by Robin Li and Eric Xu with an early investment from Google and quickly established itself as China’s largest search engine. By the time Google sold its stake in Baidu and set up its own Chinese-language search engine in 2006, Baidu was already expanding its site in the hopes of building a community that would stick around longer on the site. According to Forbes: Through acquisitions, Baidu has bolstered its wireless business, and it is working full speed on the next generation of search through voice and image recognition.

Baidu.com is China's most-used Internet search engine. Modeled after Google, it makes money by selling advertising next to search results and using a ranking system for its search in which companies pay for high listings and give Baidu.com a commission based on the number of hits they receive. Launched in 2002, Baidu.com is one of the world’s mostly widely used websites because of its dominance in China. It is widely respected in China as a company that has taken on competition from a foreign giant (Google) and come out on top. As of 2009, Baidu processed more search request in China than Google did in the United States.

Baidu has thrived since its rival Google closed its China search engine in 2010. Baidu's market share has rose from 64 percent in the first quarter of 2010 before Google's closure to 75.9 percent in June 2011 after it Google left China , according to Analysys International, a research firm in Beijing. Some put Baidu’s market share at that time at 83 percent. Google was still China's second-most popular search engine in he early 2010s but its market share declined from 30.9 percent to 18.9 percent. In September 2010 Baidu’s market share was 73 percent, compared to 22 percent for Google.

Baidu.com (pronounced “by-doo”) means “100 times” and is derived from a well-known Song dynasty poem. In the beginning the company had just seven employees. By 2010 it had 3000. When it debuted on the NASDAQ in August 2006 it was dubbed the Chinese Google and its stock prices soared from $27 to $151 in a single day. The American stock market had not seen anything like the dot.com boom.

In 2021 Baidu had 45,500 employees. It s revenue that year were US$18.6 billion with an operating income of US$1.57 billion and a net income of US$1.52 billion. In 2021, Baidu’s total assets were US$65 billion and its total equity was US$23.3 billion. Robin Li was still its CEO.

Search Engines in China

Baidu is the main search engine in China, with 558 million active users and a 74 market share across all devices (desktop, mobile, and tablet) in 2021. Sogou is the No. 2 search engine in China, with a 19 percent market share across all devices. Being is a distant third with about three percent and Others, including Google, Haosou, Shenma, have a little over four percent. [Source: The Egg, 2021]

Baidu had a 78.3 percent share of China’s search engine market in early 2012, according to Analysys International. Google Inc. was in second place with 16.7 percent, while Sogou, Tencent Soso and other competitors had less than 3 percent each. In 2008, Baidu had 63 percent of the search engine market, compared to 26 percent for Google and 8 percent for Yahoo. Google left Mainland China in 2010 due to censorship. It had invested millions of dollars in Baidu.com. After 2010, users who typed Google.cn, were redirected to Google.hk, which is Google’s Hong Kong presence. Under this arrangement only a few Chinese people use Google.hk;. Google only accounted for 0.34 percent market share by usage in China in 2015.

In 2015, total search engine advertising revenue reached US$10.55 billion — an increase of 32.2.7 percent from 2014, according to iResearch. In terms of revenue, Baidu was the leader of the Chinese search engine market (80 percent) followed by Google, Qihoo360, and Sogou. In 2015 the top three search engine in terms of usage were Baidu with 54.3 percent, Qihoo 360 with 29.24 percent, and Sogou with 14.71 percent. . [Source: KoMarketing Associates, July 27, 2016]

The daily report on Internet activity compiled at Baidu Beat found the most-searched-for item on one day in March 2012 was the fate of Fabrice Muamba, the soccer player who collapsed with a heart attack during a game in London. Other top searches on that day were a story about “Vibrato Grandma,” who sang mournfully for her dead husband on “China’s Got Talent”; a piece on an American woman, Lizzie Velasquez, who suffered from a wasting disease; and the stranding of four sperm whales on a beach in Jiangsu Province. [Source: Mark McDonald, New York Times, March 20, 2012]

English Search Engines and Climbing the Wall in China

A student at Sichuan University Peter Hessler: “When I search on Baidu, I can only find the counterpoint of my argument,” he said. “Or I find people who say things like ‘I don’t care if I’m brainwashed, as long as it gives some benefit to us.’ ” He believed that most useful sources had been removed by censors or blocked by the firewall. [Source: Peter Hessler, The New Yorker, May 9, 2022]

Hessler wrote in The New Yorker: At the university “I was provided with a list of unblocked English-language search engines, which I dutifully passed on to my classes, although, with the exception of Bing, I had never heard of any of these sites. They sounded like obscure rock bands: Dogpile, Yandex, WolframAlpha, Swisscows, DuckDuckGo. Even this third-tier-festival lineup was subject to cancellation: in 2019, during the first week of fall semester, a student could still do a DuckDuckGo search, but by week four the firewall made it DuckDuckGone. A site could be accessed only if it allowed content to be censored, like Bing, or if it remained so lightly trafficked that it didn’t draw attention.

“Sometimes freshmen showed up to my office hours simply to ask me to Google something. I had subscribed to a virtual private network before leaving the United States, and a number of students asked for help signing up for the same service, but I didn’t know how to do it without an overseas credit card. Domestic V.P.N. providers could be arranged over WeChat, but the quality varied, and first-year students were often intimidated, because such services are illegal in China.

“Over time, I learned that the best advice was: Talk to an older student. Along with mandatory political courses, learning how to fanqiang, or climb the wall, was essentially part of the curriculum at Sichuan University. Relatively few of my freshmen seemed to be climbing the wall, but many of the juniors and seniors clearly used Google and other blocked sites. It wasn’t a secret that many professors had tech support that helped them arrange V.P.N. services. One of my juniors, a liberal-arts major, described it as almost like a game. She told me, “Whenever they ask us in class to Google something, some students say, ‘We don’t have a V.P.N., so how can we Google? Can you tell us how to use a V.P.N.?’ And they say, ‘Sorry, we have support, but we’re not allowed to tell you.’”

Baidu’s Robin Li

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Baidu's Robin Li Robin Li, the CEO and founder of Baidu.com, was born in Shanxi Province in 1968. He started the company in January 2000 with $1.2 million borrowed from two U.S. venture capitalists when he returned to China after getting a Masters degree in the U.S. and working in Silicon Valley, where he did a stint working on search engines at Infoseek Corp, for several years. Li drew a huge of audience when he spoke in September 2009 at Stanford University, where Google founders Larry Page and Sergey Brin went to school.

Li received a Bachelor of Arts in Science, from Peking University and a Master of Arts from the University at Buffalo. According to Forbes: After getting an undergraduate degree in information science, Li obtained a master's degree in computer science in in 1994, and worked as a consultant at a subsidiary of Dow Jones. He later joined search engine InfoSeek in Silicon Valley as a senior engineer. Li has become more involved in politics; in 2013 he became a member of the Chinese People's Political Consultative Conference.

In 2015, Robin Li was listed as the second richest man in China after Jack Ma. Li’s net worth as March 2015 was $14.8 Billion. At that time he was 46 and lived in Beijing. He was married and had four children: In 2015, Li was the 62 richest person in the world according to Forbes, up from 91 in 2014; No. 41 Powerful People; No. 2 China Rich List. In 2007, at the age of 38, Li's net worth was valued at $2.4 billion, making him richer than Jerry Yang of Yahoo. He said at that time he owed his success to good timing. When he returned to China it had only 8 million Internet users. In 2007 it had 160 million.

In 2021, Li didn’t make the Forbes list of 10 richest people in China. In 2014, he was the second richest man in China with $14.7 billion. In 2013, he was third with $11.1 billion. Li was listed as China’s second richest man by Forbes in 2010 with $7.2 billion. He held the same rank in 2011 with $9.2 billion. The 2011 Hurun list listed him as third with $8.7 billion.

Baidu's Growth in the 2000s

Li started Baidu in 2000 with just $1.2 million in venture capital. In 2005, Baidu launched its initial public offering (IPO) in which its shares sold for $27. In 205, the company had 41,248 online customers, double from a year before, and earned about $40 million with profits of $6 million. Baidu had a stock market capitalization of $13.3 billion in late 2007. It makes good profits from advertising.

Baidu didn't really take off until Google started having problems. Google was doing quite well in China in the early 2000s. But then suddenly in 2002, all access to Google was cut off for two weeks and then suddenly came on again. To this day no one is sure exactly how this happened. Many think it was the work of s Baidu.com which was known for having a cozy relationship with the government. Google executives have pointed out that when the shut down took place Baidu.com had only 3 percent of the search engine market while Google had 24 percent. After that time Baidu.com’s share of the search engine market grew steadily and within a few years it was the largest search engine in China.

Baidu.com made record profits in the run up to and during the 2008 Olympics. In the third quarter of 2009, Baidu earned $56 million on $161 million revenues while Google made $1.5 billion on revenues of $5.5 billion. Baidu got most of its money by charging customers for ranking on their search lists. Unlike Google and Baidu’s Chinese rivals, which places its paying customers in separate boxes, Baidu lists its paid rankings with its non-paying ones.

As of late 2009, Baidu was valued at $13 billion, and Li’s stake in the company was worth more than $2 billion. At that time the company’s stock was valued at $383 a share, a 14-fold increase from its 2005 IPO price. Baidu made $1.2 billion in online marketing revenues in 2010, up 78 percent from 2009. Baidu earned $331 million in profits in second half of 2010 thanks mainly to revenues earned from online advertising. Baidu reported a 95 percent jump in net profit in the second quarter of 2011 year on surging traffic growth and strong ad spending. "We benefited from strong traffic growth and improved monetization," Li said. "We were especially encouraged with the strong spending from large customers."

In 2011, Baidu said its profit rose 88.3 percent over 2010 to $1 billion. Baidu said its number of active online marketing customers rose 12.7 percent over a year earlier to 311,000. Revenue per customer rose 61.8 percent to $2,288. [Source: Boston.com February 17, 2012]

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Baidu.com Services in the 2000s

One reason Baidu.com became so successful in the 2000s was that it was good at offering chat lines and offering service to orient users to topic they want to discus after they have entered the chat line. Sina.com and Sohu.com had used similar strategies Yahoo tried strategies that worked well in the United States and Europe but didn’t work in so well n China. Baidu expanded into Japan but didn't do so well there.

Baidu has introduced social Internet services to keep market share away from Google and Yahoo. In May 2006, Baidu launched a Chinese-language encyclopedia. inspired by Wikpedia that carried entries written by users but warned that it would delete content about sex, terrorism and attacks on the government.

Popular Baidu.com features include browser windows that pop up when a user clicks on a search result; searches for digital music downloads that reached sites where users could download pirated music for free; top 10 lists for things like sodas and snacks; trivia tests, question-and-answer forums and a service that direct users to chat lines for topics they are interested in. One of the company’s most popular offerings was the Baidu Post Bar, an online bulletin board of hot topics that accounted for nearly 15 percent of the site’s traffic in 2010. Baidu Knows, Baidu Space (for blogs) and Baidu Baike (the Chinese version of Wikipedia) were also popular.

In the late 2000s, Baidu and Google shifted their battle from the Internet to China’s mobile phone search market. As of late 2009 the two companies were tied in that market with 26 percent each. At that time Baidu was working on an online video site that would work much like Hulu.com, the site in the United States where several broadcast TV networks present their shows.

Baidu in the 2010s

As of 2013, Baidu dominated traditional Internet search with nearly 80 percent of the market in China. But it faced stiff competition in the mobile search, where its market share had shrunk. [Source: Joe McDonald, Associated Press, July 16, 2013]

Baidu's share of mobile search declined from 77.5 percent in July 2012 to 66.9 percent in March 2013. Associated Press reported: That followed the launch of a rival service in mid-2012 by Qihoo 360, an information security company, which quickly gained a market share of more than 13 percent. Baidu has expanded from search into music downloads, online video and other services. In May 2013, it announced the purchase of Internet video service PPS Net for $370 million. It said that, combined with the iQiyi.com service it already owned, would make it China's biggest mobile video platform by user numbers.

in 2013 Baidu bought 57 percent of smartphone apps distributor 91 Wireless for $1.9 billion as part of it effort to firm up its stake in the then rapidly-growing Chinese mobile Internet market. In 2013, 91 Wireless operated two smartphone app distribution platforms in China, 91 Assistant and HiMarket, The company said they had been used to download more than 10 billion apps. 91 Wireless said it was China's biggest third-party app distributor by both active users and accumulated downloads.

Kaiser Kuo and Baidu

Chinese American Kaiser Kuo is well-known figure in China and among China watchers outside of China. He moved to China in the 1980s and was a founding member of the seminal 80s Chinese hard rock band Tang Dynasty. .He later became a prolific writer and host of Sinica Podcast — the most popular English-language podcast on current affairs in China. Then he took a very high-profile job as director of International Communication at Baidu. During his stint at Baidu he was often interviewed and quoted in the foreign press about China. [Source: Laura Jenkins, Asia Society, April 27, 2016]

Kaiser Kuo was born in 1966 in New York City. He is a graduate of the University of California at Berkeley and holds an MA in East Asian Studies from the University of Arizona. He spent six years at Baidu.com, He told the Asia Society:“At a very fundamental level Baidu exists to expand the information horizon for ordinary Chinese internet users. It’s not perfect, and can’t always be done to the extent we’d all like, but the company has to work within certain parameters. The senior management of Baidu are very serious about their mission to provide the best and most equitable way for people to find what they’re looking for, and they do all they can.

“Equitability of access has always been a priority, whether it’s in creating the most naturalistic and intuitive interfaces — recently, we’ve made enormous strides in AI-based speech recognition, that can understand even quite heavily-accented regional dialects of Mandarin — or in making teaching materials used in top Beijing and Shanghai schools equally available to rural teachers and students.? Baidu has also contributed immensely to the development of the public sphere in China. China-watchers focus on Weibo and, more recently,? Weixin? when they talk about China’s online public sphere, but let’s not forget Baidu? Post Bar, which was and is still very much the place where the national conversation is happening — the place from which so many of the memes and themes emerge.

Baidu Tieba

Among Baidu’s more recent innovations is Baidu Tieba, the largest communication platform in China provided by Baidu. Tony DeGennaro wrote in Dragon Social: Baidu Tieba is a keyword-based discussion forum where users can search for information through a search bar. This forum covers hosts discussion on nearly every topic imaginable, making it another platform for businesses getting started with social media marketing in China. Users create individual “Tiebas” for each distinct topic with a dedicated moderator for each “Tieba.” Unfortunately, Baidu has stopped publishing user numbers around the platform likely meaning that it is on the decline. [Source: Tony DeGennaro, Dragon Social, 2020]

If you had to compare it to something in the West it would likely be most comparable to other open forum platforms. For the most direct comparison, this would likely be similar to China’s version of Reddit, with “Tiebas” acting like subreddits. Forums can be popular for social media marketing in China, but given their open nature things can get nasty very quickly if users feel like you’re abusing the platform for advertising purposes.

Baidu Tieba had 300 million monthly active users in February 2017 and had 148 million average daily active users in August 2018. The average visit duration was 6 minutes 52 seconds in December 2018. The market penetration rate was was 4.8 percent in September 2018. Baidu had 660 million monthly active users in 2020, according to DMR Stats, which we some thought was a bit inflated given that it only had 300 million users as of last official reporting in 2015.

Baidu Copyright Issues

EMI, Warner Brothers, Sony-BMG, Universal and other recording companies sued Baidu.com for copyright infringement and lost because Beijing No. 1 Intermediate People’s Court decided that Baidu was only a search engine that helped people locate files and offer downloads for pirated material but also ruled Baidu.com must delete links to sites that offer illegal downloads. After the decision Baidu.com launched a similar service for television and movie downloads and EMI joined the Chinese Internet company to offer free song samples, with the two companies sharing advertising revenues.

On World Consumer Right Day in March 2011 The China Recording Industry Committee of the China Audio-Video Association and a group of prominent artists independently issued two letter lodging their protests — “Open Letter of Opposition to Baidu” and “March 15 Letter by Chinese Writers Opposing Baidu”. Hu Yong of the China Media Project wrote: “Both documents pointed fingers at Baidu Books, the search engine’s library service, accusing it of violating the rights of musicians and writers. The “March 15 Letter by Chinese Writers,” written by the hand of author Murong Xuecun said: “They [Baidu] have stolen our works away. They have stolen our rights away. They have stolen our property. Baidu Books has become a market for stolen goods.” [Source: Hu Yong, China Media Project, March 25, 2011]

What is Baidu Books? According to its official introduction, it is a platform built and operated by Baidu.com Inc, allowing web users to browse and download documents and other materials from a variety of sources. By uploading files, you can accumulate points that you can then apply for the downloading of materials you need yourself. Owing to this feature, Baidu Books has developed rapidly, and there are now close to 200 million different books and other materials available. A great many of these are materials whose distribution through the platform is not authorized by authors or publishing houses.

Since 2010,, there have been many rights actions taken against Baidu Books. But Baidu has invariably applied the “haven principle” in cases of copyright, saying it has no obligation to examine materials uploaded by web users and has no responsibility for rights violations that might occur. The origin of the online “haven principle” lies with the Information Network Transmission Right Protection Ordinance “, which took effect on July 1, 2006, and stipulates that when database and search engine providers receive notification of violations by right holders they can avoid the legal obligation of compensating the rights holder simply by disconnecting the online link.

Baidu.com's Misleading Health Care Listings

In November 2008, Baidu.com came under fire for giving unlicensed suppliers of medical products — including ones that sold questionable treatments for cancer, sexually-transmitted diseases and other ailments — higher rankings for pay without alerting customers. Baidu share prices plunged after television news reported the practice. Baidu insisted no laws had been broken and it couldn’t be responsible to vouch for information on the Internet. Still Baidu went ahead and suspended thousands of questionable customers, including unlicensed operators in the medical, beauty and health food sectors, in an effort to restore confidence.

In 2008, China Central Television — the biggest state-run network — ran an exposé on how Baidu accepted money to bolster the search results of unlicensed medical companies and steered people to unlicensed and expensive hospitals or medicines that failed to cure them. One patient told the program that he had wasted more than 10,000 yuan (£950) at a clinic that he chose because it topped the Baidu results. The unlicensed clinic paid Baidu nearly 17 yuan per click (£1.60) for a prominent ranking, according to the report. The program also alleged that some companies that did not pay were omitted from results. But in a statement, the firm insisted: “Baidu has never excluded websites of any customers because they did not pay for keywords, and Baidu does not tolerate such practices.” [Source: Tania Branigan, The Guardian, November 29, 2008]

Baidu cleverly managed its way through the scandal by paying more than $5 million to be a sponsor of the state network and by courting the Chinese press. Several Chinese journalists say that soon after Baidu suffered bad publicity, the company offered to fly a group of journalists to Hong Kong for a leisurely weekend at a luxury hotel. A spokeswoman for Baidu declined to comment on the Hong Kong press outing, but media coverage of Baidu improved. [Source: David Barboza, New York Times, April 18, 2010]

In 2016 China issued new regulations demanding search engines clearly identify paid search results, months after a terminally-ill cancer patient complained that he was misled by Baidu. Associated Press reported: “Wei Zexi, a college student who died in April of a rare cancer, had written a long post on a Chinese website detailing how he was led to a Beijing hospital for treatments after searching on Baidu. He said that the treatment turned out to be ineffective and expensive and that later he learned the therapy was yet to be fully approved. Wei accused Baidu of taking money to promote less proven treatments. [Source: Associated Press, June 25, 2016]

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Allocation of IPv6 Address Space in China

Baidu and the Chinese Communist Party

Robin Li made great efforts not to upset China's ruling Communist Party. At a celebration in Shanghai for the 90th anniversary of the founding of the Chinese Communist Party, Li is reported to have said: “Walking the path of socialism with Chinese characteristics is the well-spring of strength that will allow the Chinese Internet to continue its healthy and rapid development.” Wall Street Journal June 21, 2011]

Even so Baidu was targeted by party mouthpieces. In August 2011, Baidu has been the subject of a series of harshly critical investigative reports on CCTV, the main state-run broadcaster. The Economist reported:Using undercover cameras, CCTV exposed Baidu employees apparently helping firms circumvent laws that bar unlicensed companies from advertising online. The reports also suggested that the lack of transparency in Baidu’s advertising system could lead advertisers to overpay. A Baidu spokesman refused to comment. [Source: The Economist, August 27, 2011 ]

It was not the first time that CCTV has bashed Baidu. Reports in 2008 made similar allegations, prompting Baidu to apologise publicly. The latest attacks go further, though. It might seem a bit rich for the state broadcaster of a secretive, authoritarian country to chide Baidu for murkiness. And it certainly surprises some China-watchers. Baidu has done all it can to comply with the government’s whims. It is also a national champion: its shares are listed on New York’s NASDAQ exchange, and foreigners can’t get enough of them.

So what might the criticism signify? Is CCTV attacking Baidu for political reasons, or commercial ones? CCTV has a search engine, too, which hardly anyone uses. So do two other big government-run media outfits — the People’s Daily newspaper and the Xinhua news agency. CCTV, though state-run, is not just a propaganda outfit. It is also expected to make money through advertising (and it does). It must be tempting to nobble a rival.

Image Sources: Wikicommons

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, Lonely Planet Guides, Compton’s Encyclopedia and various books and other publications.

Last updated May 2022