6 Myths Chinese Search Engine Baidu Would Rather Like To Correct

A few weeks ago, I spent a few days with the Baidu team in Beijing. My first conversation was with Kaiser Kuo who is the Director of International Communications and the very first topic we covered was in answer to the question, “What would you rather people better understood relating to Baidu and its position in the market?”

Whilst some of the responses were as you might expect – they were nonetheless revealing and fascinating.

1.  Baidu Is Not A Google Clone

You may recall my interview with Ilya Segalovich at Yandex where he already had a bunch of slides set up to address the point that all Yandex did was to copy Google.

Baidu wanted to say the same thing – though to be fair, I’ve listed it ahead of the order in which it came up – the Baidu team was much more concerned about addressing intellectual property and censorship issues which we’ll come onto later.

Baidu Sees A Few Myths In The West It Would Like To Correct!

In China, it is common for sites to offer the services they recognize in other markets to the Chinese market – the social network Renren which looks similar to Facebook is an example. This process has been called “C2C” or copy to China and Baidu has been accused of doing exactly the same thing.

However, Kaiser Kuo points out that Robin Li, the co-founder of Baidu, obtained a patent for hypertext link analysis before Larry Page obtained his “Page Rank” version.

This is the RankDex site scoring alogrithm which Robin Li developed whilst working at a subsidiary of Dow Jones on software related to information retrieval and search for the Dow Jones Newswire and The Wall Street Journal. It was granted in 1999, but was filed in early 1997, so the concept clearly preceded the launch of Google. It was the RankDex technology which provided the basis for the launch of Baidu in the year 2000.

Of course, the search “box” and a set of links to other sites below has become ubiquitous for search engines – pretty much all search engines offer information in that format today – so the fact that Baidu has a similar presentation to Google does not make it a “clone”.

Additionally, Baidu’s diverse offering of products and services vary quite signficantly from those offered by Google.

2. Baidu Doesn’t Protect Intellectual Property Owners

The accusation was made by many intellectual property owners(especially in the music industry) that Baidu did not respect the rights of intellectual property owners.

In particular, this related to links to sites where downloading unlicensed music was possible. Kaiser Kuo points out “Baidu respects intellectual property rights and has never provided the facility to illegally download music from Baidu’s servers – but we are a search engine.”

Pressure came from record labels and their industry group, the International Federation of the Phonographic Industry (IFPI) but Chinese courts consistently ruled that the practice of linking did not constitute an infringement.

Nonetheless, Baidu struck numerous deals with local, regional, and even some global record companies whereby the company would pay on a per-stream or per-download basis.

In mid-July, agreement was reached with Universal Music, Warner Music and Sony music who had joined together to form a company called One-Stop China (OSC) to jointly negotiate digital music deals in China. OSC and Baidu announced that the record companies would provide users with their complete global catalogues, including both Chinese songs in Mandarin and Cantonese as well as international releases, directly from Baidu’s servers.

In addition to this, Baidu has said it will remove all links to third-party sites hosting content now under license from OSC and other record labels. Equally, it is quite clear that Baidu is working to re-establish a reputation as an ethical company and feels somewhat unfairly treated by western commentators with regard to its intellectual property history.

As far as protecting trademarks is concerned, Baidu was recently criticized by the CEO of 360buy for selling brand keywords to competitors – a practice which Google has been actively promoting around the globe with much less comment!

3.  Too Many Ads in Organic Search

It is certainly true that some years ago Baidu had a very different approach to including ads in its results pages. It was entirely possible to have two or three pages of ads before you reached any organic results. These ads were placed in the normal listing and if you couldn’t read Chinese,  they were difficult to distinguish from normal organic results especially as they had no distinguishing background colour.

At that time, the ads on the right hand side of the page looked as if they were the same type of thing which Google placed in that position – namely sponsored links. They weren’t – they were ads from different advertising programs which Baidu was running at the time – at least until you arrived on page two when they would include “pay per click” ads.

Baidu changed all this with Phoenix Nest which was initially launched in December 2009. This changed things radically but the memories of many are still influenced by the pre-Phoenix Nest era.

Explains Kaiser Kuo, “In addition to marking the ads as “advertising” they are now limited in most cases to three on the page before the organic results and either have a color undertone beneath them or are otherwise clearly marked as paid results.”

4.  Baidu Punishes Organizations For Not Buying Advertising

This is an accusation which is levelled at all search engines and we will spend no more time on this than saying that Baidu confirms this is “Absolutely not true!”

One of the reasons why this myth may be stronger than with other search engines, is that a much larger proportion of Baidu’s advertising is sold face to face – rather than through a self-serve platform.

You can imagine that thousands of resellers are difficult to control and it would not be surprising if some of them promised to speak their Baidu contact and get things sorted out for them. (I have seen this happen with Google too – but Google has possibly done a better job of communicating that it doesn’t actually help.)

5.  Baidu Plays On A “Tilted Playing Field”

Who owns Baidu? The Chinese government perhaps? And does the Chinese government make it so much easier for Baidu to succeed than Google?

It would be fair to say that Kaiser Kuo was particularly vexed on behalf of his company that people might genuinely believe the Chinese government was “tilting the field in favor of Baidu!”

He explains, “There’s no government shareholding, there are no communist party executives placed in charge of things here, no shadow board – Baidu operates fully at arms length from the Chinese government in just the same way as any typical western company would.”

Kaiser Kuo, Baidu International Communications Director And Andy Atkins-Krüger In Baidu's Reception

He adds, “There are actually two state-owned search engines which compete with us – so we definitely aren’t getting special favors.”

In fact, this point has been emphasized more recently with direct criticism from the Chinese government of Baidu. This criticism cited examples such as Baidu helping pharmaceutical companies to promote weight-loss products – which of course never happens in the west, does it?!

Speaking from personal experience, when my company has discussed the promotion of products we were not sure were legal in China, Baidu have been both very helpful and very strict about what it is possible to promote.

The criticism, which came from the Chinese government using state-owned media to deliver the blow, succeeded in knocking as much as 10% off the Baidu stock price which does rather seem to prove that Baidu does not have an 85% share in China because the government has deemed that they should have.

It is also not the case (as I have seen quoted in online blogs) that the Chinese government pushed Google out of China. The gap in the market in China arose because Baidu was there first, had strong brand recognition in China and Google’s untimely withdrawal simply gave some extra support to that.

By the way, in answer to the question of who owns Baidu, stockholders of “BIDU” the NASDQ listed company own a significant proportion of the shares with a market capitlization of just over $46 billion.

6.  Baidu Is Proactive On Censorship

If Mr. Kuo was vexed about the tilted playing field, we’d have to consider him “incensed” over the various statements made about Baidu’s compliance with Chinese government censorship. Kaiser describes this compliance as a “Big deal”.

It’s not something they do lightly and he points out that Baidu has to employ many staff to manage the censorship and ensure compliance with government regulations. (Since my visit, the Chinese government has announced a special unit to handle Internet censorship).

Says Kaiser Kuo, “We’re dedicated to expanding users’ information horizons, and to providing the most equitable way for all to access information. At the same time, just as any company, we simply must comply with the laws of the country in which we operate.” He also points out that Google’s move to Hong Kong and their “arrangement” whereby People’s Republic of China citizens can visit Google.com.hk by clicking on an image in Google.cn means that Google has saved itself the cost of complying with censorship.

Baidu is certainly reactive to the requirements of censorship – but proactive?

That would mean that Baidu was inventing its own areas to censor. That, it appears, is no more the case than the idea that Baidu copied Google in the first place. But perhaps it would be true to say that to a large extent, the culture of silicon valley has been, if not copied, adopted and adapted.