Digital A-List 2008

Digital A-List 2008: No. 8, Baidu

The 'Google of China' Is Moving Past Text-Based Search to Video, IM

By Published on . is known as the "Google of China," the world's second-largest online market. China boasted 210 million internet users at the end of 2007. Founded in 1999 by Robin Li, a frustrated staff engineer at search engine Infoseek, Baidu has a dominant 62% share of China's search-engine market, according to China IntelliConsulting Corp. Google is the No. 2 player, with a 22.7% share, followed by Yahoo at 10.8%.
Robin Li, founder of Baidu
Robin Li, founder of Baidu

Dick Wei, analyst at JPMorgan Technology Research in Hong Kong, says Baidu's share "is likely to be higher." Beijing-based Baidu continues to be the "search engine of choice among new search advertisers; 60.4% of new advertisers spend on Baidu only vs. 13.5% on Google. Customer-retention rate for all search engines is above 80%, suggesting good ROI and high adoption for search advertisers," Mr. Wei says.

China's online ad market surged 75% to almost $1.5 billion in 2007, according to iResearch. Growth was largely driven by a boom in search-engine advertising, which soared 109% last year and accounted for 27% of the market in terms of value. Baidu's revenue grew 110.5% during fourth quarter 2007, compared with the same period in '06.

"As the number of internet users in China continues to grow, we believe there are tremendous opportunities ahead for us and our partners," says Mr. Li, the 39-year-old chairman-CEO of Baidu.

Mr. Li launched Baidu TV last fall through a deal with Ads It Media Corp., a Chinese online-video advertising platform provider, to expand Baidu's revenue base beyond text ads. It will provide advertisers access to about 160,000 websites.

Mr. Li plans to take Baidu into China's instant-messaging and customer-to-customer sales markets. That will pit it against two other successful Chinese dot-coms: the IM giant Tencent QQ and, part of Alibaba Group.
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