China search giant Baidu blasted by state media

Aug 18, 2011
A man walks past the logo of Baidu at its headquarter in Beijing, 2010. China's state media has launched stinging attacks on the nation's hugely popular search engine Baidu, in what analysts say may signal government unease about the firm's growing market power.

China's state media has launched stinging attacks on the nation's hugely popular search engine Baidu, in what analysts say may signal government unease about the firm's growing market power.

This is the second time that the privately-held has come under strong media criticism, after state television blasted its advertising practices in 2008, forcing it to revamp part of its business.

The state-run China Central Television (CCTV) once again attacked the firm -- which accounts for more than three-quarters of China's web -- earlier this week in a programme that alleged fraud by Baidu advertisers.

The show, aired on CCTV's business channel, claimed Baidu users were losing money on phony airline tickets allegedly sold by advertisers on the .

Wu Yue, host of the programme, told the audience: "Obviously Baidu is not able to solve the problem through self-discipline. A company's fundamental motive is to chase profits."

"If there is no law or regulation in place to restrict it, it is difficult to improve the situation at the roots," she said.

The People's Daily, mouthpiece of the ruling Communist Party, joined in the criticism with an opinion piece Tuesday that said Baidu could be "abandoned" by Internet users if it only focused on short-term profits.

"It's time for Baidu to shoulder ," it said.

A spokesman for the search engine declined to comment.

Bill Bishop, an independent Beijing-based analyst and adviser to Internet start-ups, said there were several theories as to what was behind the criticism, including possible machinations by current or potential competitors.

"Baidu has become an effective monopoly in Internet search," he wrote on his blog DigiCha.

"It is unlikely the government is pleased with Baidu's market power, and the CCTV report may be a sign that Baidu should expect increased scrutiny and regulation."

In 2008, CCTV criticised Baidu for allowing advertisers to pay for space alongside top search results, without labelling it as an ad, prompting the search engine to overhaul its advertising business.

The criticism has sent Nasdaq-listed shares of Baidu down more than eight percent so far this week.

Dick Wei, a Hong Kong-based analyst with JP Morgan, said the issue could have a short-term impact on the company's revenue, but was still bullish about the firm.

"Given differentiated technology and market leadership, we think the long-term prospects for Baidu are still very positive," he said.

Explore further: Digital dilemma: How will US respond to Sony hack?

add to favorites email to friend print save as pdf

Related Stories

China's Baidu search engine launches English blog

Jan 11, 2011

Chinese search engine giant Baidu has launched an English-language blog on the country's online culture, a company spokesman said Tuesday, as the firm looks to expand into overseas markets.

Baidu edges ahead in Chinese online market

Jan 19, 2011

Search engine Baidu further strengthened its dominance of the Chinese Internet market in the fourth quarter at the expense of US rival Google, a research firm said Wednesday.

China's Baidu eyes foreign expansion

May 26, 2011

Chinese search engine Baidu said Thursday it was thinking about expanding into more overseas markets and expected its share of the booming domestic mobile search market to grow rapidly.

China's Baidu quarterly profit up 95 percent

Jul 26, 2011

Baidu Inc., which operates China's dominant search engine, said Tuesday its quarterly profit jumped 95 percent on traffic growth and strong spending by big advertising customers.

Recommended for you

Digital dilemma: How will US respond to Sony hack?

Dec 18, 2014

The detective work blaming North Korea for the Sony hacker break-in appears so far to be largely circumstantial, The Associated Press has learned. The dramatic conclusion of a Korean role is based on subtle ...

UN General Assembly OKs digital privacy resolution

Dec 18, 2014

The U.N. General Assembly has approved a resolution demanding better digital privacy protections for people around the world, another response to Edward Snowden's revelations about U.S. government spying.

Online privacy to remain thorny issue: survey

Dec 18, 2014

Online privacy will remain a thorny issue over the next decade, without a widely accepted system that balances user rights and personal data collection, a survey of experts showed Thursday.

Spain: Google News vanishes amid 'Google Tax' spat

Dec 16, 2014

Google on Tuesday followed through with a pledge to shut down Google News in Spain in reaction to a Spanish law requiring news publishers to receive payment for content even if they are willing to give it away.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.