... Google’s share of the Chinese search market pales into insignificance compared to its local arch-nemesis Baidu. Google holds a mere 25% of the search market in China; Baidu, by contrast, controls more than 60%.Foreign observers are fascinated by Baidu’s consistent ability to outperform the clear global market leader. At the 17th International World Wide Web Conference, WWW2008, in Beijing earlier this year, Baidu vs. Google was a common topic of conversation. Most speakers and delegates praised Baidu for its clever manipulation of the local market. But some warned that, in the long run, Google’s sheer size and international scope may give it a slender advantage.
ADVANTAGE BAIDU
Business practices, rather than the quality of its search results, have contributed to Baidu’s dominance in China.
One of Baidu’s strategies, according to Paul Denlinger, principal of the strategic investment advisory firm China Business Strategy, has been to educate small businesses about keyword search. “Baidu has built up a network in China,” Denlinger said. “It’s basically built around educating Chinese small businesses about search and monetizing it up front, whereas Google is [simply] moving Silicon Valley culture to China.”
By developing and promoting advertising products such as targeted keyword ads and paid search results among Chinese businesses, Baidu has grown its advertising business quickly, with first quarter 2008 revenues reaching RMB 574.4 million (USD 83 million), more than double the same period last year. Over 99.5% of these revenues are derived from online marketing, and profits also increased almost 100% year-on-year ...
This is a very interesting article.
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Has the Chinese government had anything to do with this?