Gordon Choi | August 16, 2011
In recent years, Baidu has been trying to build an Internet empire for the Chinese market. Search being the core, Baidu connects other verticals such as branding, box computing, travel search, maps, wikis, answers, and social around search.
Baidu has gained search market share since Google first announced exiting the Chinese market last year due to opinion differences in how to handle censorship.
In December 2009, Baidu launched the new paid search auction system, Phoenix Nest, to replace the long out-dated and broken old paid search system.
Both search market share gain and Phoenix Nest system have allowed Baidu to further grow revenues from search advertisers and acquire more users.
Baidu’s advertising product brand link ads allow search advertisers to buy a ‘full screen’ of ad space on their own brand keywords.
For example, YiHaoDian, China’s online supermarket, puts up brand link ads on Baidu. Keyword searches ‘yihaodian’ (both in Chinese Pinyin or the actual Chinese characters) will trigger Yihaodian’s brand link ads to show up.
Most of the ‘hard-earned’ big brands in China are now buying Baidu’s brand link ads and are receiving search traffic and increasing brand exposure on Baidu’s brand link ads.
The concept of ‘box computing’ was announced in an official Baidu conference in the second half of 2010. The message is that Baidu is no longer only a search engine that allows users to find what they are looking for and the middleman to redirect you onto another site.
Users had to do many interactions with many websites, but with Baidu’s box computing implementation, users will stay on Baidu’s search interface and will be able to complete the interactions on Baidu.
For example, users on Baidu can now log on to Kaixin001.com (a Chinese social network), send weibo (Chinese tweet) messages, and click and play a game (e.g., battle tank) all directly right on Baidu’s search interface without even having to arrive at the ‘target’ websites.
Log in to Kaixin001.com
Play Battle Tank on Baidu
Baidu has started monetising on box computing implementation by making it a ‘paid product’.
As online travel demand grows both globally and locally in China, Google integrated Places in organic search results with Hotel Finder. Chinese Internet company Tencent bought stakes in eLong.com (a Chinese subsidiary of global online travel giant Expedia).
Baidu recently acquired Qunar.com, a Chinese travel search engine that allows users to compare prices on flight tickets.
Baidu immediately integrated Qunar’s travel-related data into Baidu search. The right hand side spot on Baidu search was used to show paid search ads, but now it is dedicated to Qunar’s ads.
Scroll down half way (i.e., after the first 10 hotel related paid search ads) and you will find Qunar’s hotel search box being embedded. Qunar’s search box is followed by the first organic search result.
Baidu’s maps show up hotel name searches and many other location name searches. Even the look-and-feel of Baidu maps is almost identical to that of Google Maps (prior to Google Places integration).
Many pages of the Chinese version of Wikipedia.org have been blocked in China due to censorship. Baidu’s Baike, the equivalent of Wikipedia in China, is a necessary replacement for Chinese users.
Search engines tend to relate wiki content to informational type of searches. Google gives high organic rankings to Wikipedia pages, while Baidu tends to rank its own Baike pages high for informational searches.
Both Baidu and Tencent offer ‘answers’ types of vertical (similar to Yahoo Answers). Baidu Zhidao and Tencent Wenwen can both help users solve their unanswered questions, but Baidu again tends to rank its own product, Zhidao, high up in organic results.
With Taobao, Tmall, 360Buy.com, Dangdang.com, and many other B2C sites that are very strong in their own niche in China’s e-commerce world, Baidu had to make an important strategic decision about the future of Youa.com, Baidu’s ecommerce site.
Earlier this year, Baidu shut down Youa’s e-commerce and switched it to a classified community site. Now Youa’s major competitor is no longer Taobao, but classified websites such as Baixing.com and Ganji.com.
Baidu has not yet found the success formula for social. Last year, just before Sina Weibo became the most popular microblogging platform (and the world’s second largest microblogging platform just behind Twitter), Baidu launched its own microblogging platform, t.Baidu.com. However, Baidu’s microblogging platform could not only replicate Sina Weibo’s success, it was shut down by Baidu in less than a year since launch.
With Tencent QQ’s long history and large Chinese user base and Sina Weibo’s momentum and popularity, Baidu looks unlikely to even take a small piece from the Chinese social world.
Will Baidu’s social be able to take off? Or will social be the “forever” missing puzzle piece for Baidu’s Chinese Internet empire?