Viacom to Send Video to China’s Internet

July 2nd, 2008

HANGHAI, Oct. 17 — Viacom said on Tuesday that it had struck a deal to provide television and music video content to Baidu, one of China’s biggest and fastest-growing Internet companies.

The alliance between Viacom’s MTV Networks and Baidu.com, one of the world’s most heavily trafficked Web sites, is the biggest effort so far to introduce American television and entertainment content and programming into China.

The deal comes just two months after MTV Networks — which produces the MTV music video channel as well as Nickelodeon and popular cartoon programs like SpongeBob SquarePants — formed a similar alliance with Google to distribute advertising-supported video clips over the Internet.

“This is an extraordinary milestone for us,” said Bill Roedy, the head of MTV Networks International. “This gives us an amazing opportunity to tap into a new market.”

Western media companies, including Viacom, have struggled to get their programming onto television in China, and they have often been frustrated by new regulations, restrictions, delays and other hurdles.

Asked whether the new deal was a way for MTV Networks to get its programming into China through a means other than television, Mr. Roedy said no.

“This was not designed to get around the regulations,” he said. “We know how to live with regulations.”

Viacom officials point to their recent deals with China’s two major mobile phone service providers, China Mobile and China Unicom, to deliver music charts, entertainment news and ring tones. MTV’s popular SpongeBob SquarePants program recently began running on state-controlled China Central Television, or CCTV. And new consumer product tie-ins to the cartoon shows are beginning to show up here.

MTV officials also say the deal is not unique to China; they say MTV Networks has been aggressively expanding into digital products for the last few years, producing programming and content specifically for the Internet and mobile devices and broadening its reach.

Today, MTV is broadcast into southern China and some foreign hotels and residences, and Viacom has an alliance with the Shanghai Media Group. But otherwise very little American programming makes it onto China’s main television channels. And Disney and News Corporation programs are rarely seen.

Analysts here say most Internet users in China are far more interested in entertainment than in search or pure information. So, they add, the MTV alliance with Baidu makes some sense.

“The demographics between MTV and Baidu — they are very similar,” said Richard Ji, an Internet analyst at Morgan Stanley. “Seventy percent of the Internet users in China are under the age of 30. And MTV is very popular in China but they do not have full landing rights.”

Baidu, which is widely known here as China’s Google, is already the fourth-most-trafficked Web site in the world with more than 250 million page views a day. And China, with about 123 million users, is the fastest-growing Internet market, now second only to the United States.

According to the agreement, MTV Networks will provide Baidu with 15,000 hours of original video and licensed music content, much of which will be dubbed and tailored to Chinese viewers. For instance, many videos will feature Chinese, Hong Kong and Taiwanese artists now popular here. And most of the content will range from 10 to 30 minutes long.

To avoid copyright issues with American music companies, most of the music available on Baidu’s site will come from Asia.

Also, as part of the deal, Baidu said it would create its first branded area on its Web site, which will be called MTV Zone.

Viewers will pay a fee to download the content and there will also be advertising linked to the content. The two companies, MTV Networks and Baidu, will share the revenue with music companies.

From : The New York Times.

Searcher Behavior In China

June 26th, 2008

Attendees of Search Engine Strategies conferences in North America and Europe know that the searcher behavior panel has grown into one of the most popular sessions of the show. No surprise why: sophisticated search marketers have mostly mastered the tactical aspects of their craft, and in looking for a competitive edge turn to one of the least-understood variables of the overall search marketing equation—the needs of searchers and how best to satisfy them.

The Searcher Behavior panel at SES China offered some of the first research ever done looking at the needs of Chinese searchers. The results were fascinating, and in some cases surprising. While Chinese searchers shared many characteristics of western searchers, their behavior was also quite different—sometimes dramatically different—from their counterparts elsewhere in the world.

Gord Hotchkiss of Enquiro kicked things off by presenting findings from a new eyetracking study on the behavior of Chinese-speaking users who completed search tasks on market leading engines Baidu and Google China. In a nutshell, Enquiro found that Chinese users interacted with search results in vastly different ways than western searchers. Gord plans to write up a report of the study and its findings for Search Engine Land very soon, so I won’t steal his thunder. Keep an eye on the Just Behave column in June for the full details.

Deborah Fallows, senior research fellow of Pew Internet & American Life Project, has been living in China for the past eight months (see her hilarious At Home in Shanghai, a week’s worth of diary posts on living in China).

Deb has done several studies for Pew focusing on the user perceptions and attitudes of American searchers. She’s continued this work in China, attempting to understand who Chinese searchers are and they are and how they use the internet. Unlike Enquiro’s eyetracking research which looked at behavioral responses to search results, Deb’s research is based on user perceptions and attitudes. Using data from the China Internet Network Information Center (CNNIC—the state network information center of China), and Guo Liang, a Chinese researcher at the Academy of Social Sciences in Beijing, Fallows has assembled a fascinating portrait of internet users in China.

Contrary to the U.S., search is not one of the most common online activities in China. What are the most popular activities for Chinese internet users?

Get news - 93%
Surf the web - 86%
Listen/download music - 85%
Play online games - 84%
Use email - 69%
Instant messaging - 67%
Use search engine - 63%
Research products & services - 63%

These activities are very different than the most common activities of U.S. internet users:

Use search engine and email - tied at 91%
Find health info - 79%
Check the weather - 78%
Get travel info - 73%
Get news - 67%

“While searching is important, there are other things on the internet that [Chinese] users will do,” said Fallows.

Popular activities don’t always equate with the types of things users spend the most amount of time doing. What online activities do Chinese users spend the most time doing?

Emil - 56%
News - 54%
Search - 52%
Getting information (products, health services, gov etc) - 41%

This suggests that although search isn’t one of the most popular online activities, it’s still something that Chinese users spend a lot of time doing (indeed, Enquiro’s research found that Chinese searchers using Baidu spent two to three times or more longer examining search result pages than U.S. based searchers).

Deb thinks that Chinese users enjoy interacting with search engines. “People are very engaged with search engines on the Chinese internet, as much as anything as they do. And it’s something that will probably increase as time goes on,” she said.

What about the actual duration of time spent with search engines each week? Deb offered the following stats from the CNNIC January 2006 “17th Statistical Survey Report on the Internet Development in China.”

2.2 hours searching for work or study info
2.0 hours doing email
1.7 hours searching for personal hobby info
.9 hours playing online games
.9 hours reading news
.7 hours chatting

These numbers are significant, as the average Chinese internet user spends 15 - 16 hours per week online.

“In the U.S. we’re used to people searching frequently, but we’re not seeing them spend a lot of time on search engines,” said Fallows. One possible reason that users are spending so much time searching is that they’re not finding relevant results as quickly as U.S. searchers. Deb also suggested that it could be due to slower internet connections that cause downloads of search result pages to take longer.

“People spend a lot of time on search results. I also suspect that there’s a lot more hanging around on discussion boards to discuss the results that they get,” said Fallows, noting a feature found on Chinese search engines that’s typically not present on U.S. search engines.

How about popular topics? By category, Chinese users sought out:

Entertainment - 68%
Work or study information - 56%
News - 43%
General knowledge - 43%

“This underscores that the state and interest of the internet in China is very heavily geared toward entertainment,” said Fallows.

How successful do Chinese searchers consider themselves to be when it comes to finding information on the internet?

14% say they usually find what they’re looking for
56% say they often find what they’re looking for
30% say they sometimes find what they’re looking for.

These findings mirror what Pew has found in the U.S. “This is a very strong result. That means that they have a pretty good sense of themselves as searchers and consider themselves successful,” said Fallows. However, “People have an inflated sense of themselves as searchers. Maybe people think of themselves as better than they actually are. They don’t really know how to handle search engines that well.”

Deb has an optimistic view of the future of search in China. “Search engine use will be increasingly popular,” she said. “People will search for more topics. Time is on the side of search engines and search engine users. People will search more and they will get better at it,” she said.

Deb concluded by offering a tip for search marketers in China trying to connect more effectively with prospects. “Try to think of yourselves as an internet user, because most of the people using the internet don’t have nearly as much sophistication as you do,” she said.

Next, Tony Fu, Research Director for Data Center of the China Internet presented findings from data collected in 2007 survey, trying to understand the opportunities for search advertisers in China. Fu spoke rapidly in Chinese, and the translators seemed to miss or garble most of his points, so I’ll try to report what I gleaned mostly from looking at his powerpoint slides.

Fu said that the search engines face a dilemma in China. They have more users than the popular portals (Sina, Tom.com et al), but portals currently have greater advertising revenue. So there’s a big opportunity for search engines to capture some of that online advertising spend, if they can figure out how to connect more effectively with their users.

The usage overlap with users of search engines and portals is 100%, but Fu believes that search engines have greater potential, and he foresees an evolution as users migrate away from portals and toward search engines, a pattern that played out in the U.S. in the late 1990s and early 2000s.

Fu thinks the current problem is that search engines aren’t tapping their full potential. He says they haven’t established effective ad measurement systems yet, especially when compared with the data provided to TV and newspaper advertisers in China.

Fu said that search engines have the advantage over portals going forward because search engine users tend to be more loyal than portal users. Furthermore, newcomers to the internet in China tend to start out with a portal, then migrate to a search engine as they become more comfortable navigating cyberspace.

The findings presented by all three speakers were fascinating, but only underscored how little is really known about searchers in China. Hopefully, all three of the panelists will continue this important work in understanding the mind of the Chinese searcher.

From Search Engine Land

Credit Card Market Welcomes Its Age In China

June 10th, 2008

 

In China, it used to be a fact that only people with stable jobs and income gets credit cards. At that time, there weren’t many Chinese accept the idea of borrowing money from the bank. For them, having a debt is something goes with pressure.

 

Until recent years. the quicken pace of development enables Chinese credit card market to welcome its age.

 

At colleges lying in big cities, boys and girls —- almost everyone of them, having at least one credit card in their pockets—-some may have two or three. They don’t have a full-time job ( maybe not a part-time one either) at all, but that isn’t what the bank cares about. In order to widen its business, it persuaded themselves to trust that the parents of those undergraduates will pay for their kids finally since the young often fail to manage their pocket money well. Moreover, when the young consider holding a credit card something cool, they go their utmost to persuade their dear mama and papa. There are about 1,600,000 undergraduates in China, how many credit card we can sell then?

 

Some friends of mine used to go China for a trip in early years complained that they just couldn’t find a place to use their cards:  “Cash please.” “Cash only.” —-‘I can speakthe two sentences in Chinese.”, Janet told me .

If you are told by people around like the above, they must been to China long time before. In most big cities in Mainland China, credit card is acceptable almost everywhere from Walmart to a little so called store. VISA, Matercard… kinds of shining logos represents a soaring development of a country with 1/5 population in the world.

 

The last but not the least, studying or traveling abroad is no longer a dream for people in China. In some top cities like Shanghai, Shenzhen and capital Beijing, which country to go this vacation is the best has already been one of the hottest topics. Most of them are willing to go America, England or the Europe. In this case, they need to apply for a credit card which is useful not only in their nation.

 

In short, from my point of view, gold is lying under the market of Chinese credit card. Are you ready to go??

 

 

 See what the consultant says

The Chinese Credit Card Market Presents Great Opportunities

Credit Card Market

Overview

Through the year ending December 31, 2004, China issued 762 million bankcards, of
which 664 million were debit cards and 98 million were credit cards, according to the
latest statistics from the People’s Bank of China (hereafter, PBOC), the nation’s central
bank. There are over 150 banking card issuers, including the ‘big four’ banks: the
Industrial and Commercial Bank of China; the Bank of China; the China Construction
Bank, and the Agricultural Bank of China. There is also a fast-growing second tier of
shareholding banks and city commercial banks that issue banking cards. China’s state
owned commercial banks also issue dual-currency cards that allow cardholders to
purchase goods within China, in RMB, and while abroad, in US dollars.

Nationwide, about five percent of purchases are made using bankcards, up 2.9 percent
from three years earlier. The percentage is as high as 20 percent in big cities such as
Beijing, Shanghai, and Guangzhou and Shenzhen. Consumers use their credit cards
mainly to purchase houses, vehicles, and home appliances, as well as to pay utility bills.
China UnionPay, which was established to set up a national processing network
connecting merchants and banks, has set up a national bankcard information switch
center and bankcard network service centers in 18 cities. As of December 30, 2005,
China had approximately 500,000 POS machines and 70,000 ATMs. About 300,000
merchants in China accept banking cards.

Best Products/Services

There are many opportunities for U.S companies in the credit card market:
* Credit card-related hardware, including POS and ATMs etc.;
* Credit card-related software for banks and merchants;
* Credit, risk and client management software or training programs for banks;
* Disaster back-up system for the banks’ individual credit information database
* Call center related products for banks

Opportunities
The Chinese government is working with relevant industries to advance the development
of the credit card system in China.

In August 2005, the PBOC promulgated the Provisional Rules on Management of Individual
Credit Information Database, which is a milestone in the construction of a national credit
information system. Once activated, the system will play an important role in ensuring
the smooth operation of an individual credit information database and in facilitating the
healthy development of credit card industry in China. Since 2004, efforts have been
made to speed up the construction of an individual credit database on the basis of the
national bank credit registry and inquiry system network. After a successful pilot
operation of the individual credit database was conducted in seven cities in December
2004, the database has since been expanded to cover 127 commercial banks
throughout the country. The network connects four state-owned commercial banks, 12
national joint-stock commercial banks, and 111 city commercial banks. Additionally, two
commercial banks in unidentified cities are currently conducting tests.

China is gearing up to host the Beijing 2008 Olympics Games, an international event that
can help to spur faster growth in the credit card industry. According to the Beijing
municipal government’s credit card development plan, by 2008, 90 percent of business
establishments in Beijing will accept credit cards. Card expenditures will account for 25
percent of total consumption.

View the Chinese market from the recent earthquake.

May 23rd, 2008

 

The earthquake stroked China in May. Besides the number of death ( over 50,000) , we are also impressed by its open attitude to the outside. In the past, China was known as a country which usually hide many of its reality to the public and only tell what was good to know.

 

Now it’s different. With the booming economic, China began to learn from the developed countries like USA, UK, France, etc. Obviously this country has realized that accessing the international is the best—actually the only way to grow stronger.

 

The authorities’ attitude largely inspired overseas investor army to walk straight to this large potential market. The crowded road is said to be the Internet.

 

Yep, China enjoys around 220 millions Internet users by the end of Feb. 2008, surpassing the US.

 

Many western investor wonder, might Internet be a good beginning to go?

 

From my point of view, both big and small companies are right to do this.  Let’s discuss the smaller ones.

 

There are already some Ebay sellers who tried to sell their characteristic goods to the whole world, including those in China—-you may sea numerous of Chinese Tang clothes, Tibet silver earrings and such. Such kind of websites do provides sellers to break through the distance . But what about the language? There are about 23% Chinese are learning English, but how many do you think they can understand except “bye” and “Hi”?  The attractive description and charming phrases are just in vain. Moreover, they have their own transaction webs like Taobao (http://www.taobao.com) or Paipai (http://www.paipai.com), why do they need to buy through an English web with unfamiliar language?!

 

Speaking of selling, advertising is always essential. Baidu, known as the China’s google, earns enormous sums of money from its  ad services like bid ranking services and so on. However, the same with the other top Chinese business website, Baidu does not offer ad services for people in countries except China and Japan. Transaction cannot be made by USD, staffs speaks Chinese or Japanese… its ignorance stopped us.

 

The last but not the least, some business in the US are not visible mainly because Many foreign businesses’ websites are not accessible in China and Baidu normally does not include foreign businesses’ websites in its search results.

 

But, how can we stop entering a market which will largely benefit us by all the above? What we need is someone to change our ads into Chinese in order to make them better understood (or make one suitable for the local market) , someone to help us find some hot Chinese websites e.g. Baidu (http://www.baidu.com), Sina (http://www.sina.com), 163 (http://www.163.com) to promote the goods, someone offers services in USD, the last and the most important: someone offers such services in a reasonable price. After all it’s not that practical to enquire some personal or small firms to put a large fee on advertising.

 

Is there anyone meet all the above?

 

What about AC-Baidu (http://www.ac-baidu.com) ? Its name is interesting, I think the complete one should be “Access-Baidu”.  I found it when writing this article. The basis of the AC-Baidu co. lies in the US, detecting the needs of many local investors, they build up AC-Baidu aiming at improving China-America business in different industries.

 

It says that telecommunication industry, mechinary industry, aviation and aerospace industry, electronic industry, service business, mechanical industry, credit card industry, service business are hot in China, so these are the special fields Ac-Baidu trying to let its customers to know.

 

 

 

 

 

 

Review:The Rise of Baidu

May 20th, 2008

 

Rob Tannenbaum/Nasdaq via Associated Press

Robin Li, center, signing the lectern during the close of Nasdaq trading on Aug. 5, 2005, Baidu’s first day as a listed stock on the market.

 

IN the summer of 1998 at a picnic in Silicon Valley, Eric Xu, a 34-year-old biochemist, introduced his shy, reserved friend Robin Li to John Wu, then the head of Yahoo’s search engine team.

Mr. Li, 30 at the time, was a frustrated staff engineer at Infoseek, an Internet search engine partly owned by Disney, a company whose fading commitment to Infoseek did not mesh with Mr. Li’s ongoing passion for search. Like Disney, Mr. Wu and Yahoo were also losing interest in the business prospects of search, and Yahoo — in a colossal corporate blunder — eventually outsourced all of its search functions to a little startup named Google.

Mr. Xu, who had called together some friends for a documentary he was making on Silicon Valley, thought the two search guys would hit it off. Mr. Wu says he exchanged greetings with Robin Li, but what most impressed him was that despite all of the pessimism surrounding search, Mr. Li remained undaunted.

“The people at Yahoo didn’t think search was all that important, and so neither did I,” says Mr. Wu, who is now the chief technology officer at the Chinese Internet company Alibaba.com. “But Robin, he seemed very determined to stick with it. And you have to admire what he accomplished.”

Indeed. A year after the picnic, in 1999, Mr. Li founded his own search company in China, naming it Baidu (pronounced “by-DOO”). Today, Baidu has a market value of $3 billion and operates the fourth-most trafficked Web site in the world. And Baidu is doing what no other Internet company has been able to do: clobbering Google and Yahoo in its home market.

While Baidu continues to gain market share in China — and does so with a Web site that the Chinese government heavily censors and that gives priority to advertising rather than relevant search results — some analysts question whether Baidu can withstand competition from Google and Yahoo, which possess superior technology and global work forces.

But Baidu’s evolution, and Mr. Li’s journey as an entrepreneur, offer textbook examples of the payoffs and perils of doing business in China and suggest that Baidu may prove to be far more resilient than some analysts believe. China has a population of 1.3 billion, about 130 million of whom are Internet users, an online market second in size only to the American market. Because China is the world’s fastest-growing major economy, analysts consider it the next great Internet battleground, with Baidu uniquely positioned to prosper from that competition.

In exchange for letting censors oversee its Web site, Baidu has sealed its dominance with support from the Chinese government, which regularly blocks Google here and imposes strict rules and censorship on other foreign Internet companies.

In addition, analysts say, entrepreneurs in China have a knack for pummeling American Internet giants. “The globally dominant U.S. Internet companies have failed to take the No. 1 market share position in any category,” says Jason D. Brueschke, a Citigroup analyst, of the Chinese market. “And they came with more money and major brand names. And so there’s something fundamentally different about this market.”

So fundamentally different, Mr. Brueschke believes, that Baidu will retain its hammerlock on the Chinese search industry. “The real battle in the competitive landscape is not about who’s No. 1, it’s about who’s going to be No. 2,” he says.

Google, of course, will have none of this, stressing the independence of its search results and the international reach it offers users. “People want information and they want global information,” says Kaifu Lee, the president of Google in China. “We can’t be bought.”

But Mr. Li says Baidu’s model is working supremely well and that the company has built a loyal base of users who value its search capabilities. “At the end of the day, if a user finds relevant information, they’ll come back,” he says.

ON its corporate Web site, Baidu says that it takes its name from a Song Dynasty poem written several centuries ago that “compares the search for a retreating beauty amid chaotic glamour with the search for one’s dream while confronted by life’s many obstacles.”

Mr. Li, born Li Yanhong in 1968 in what was then an impoverished city 200 miles southwest of Beijing, is familiar with life’s obstacles. The fourth of five children, he grew up during China’s brutal Cultural Revolution. Despite the oppression that surrounded him, he said he was always able to focus on stamp collecting, performing traditional opera and other interests — including, eventually, computers. He was bright enough to get into the country’s most prestigious school, Beijing University, where he majored in library science and dabbled in computer science.

The government infamously cracked down on pro-democracy demonstrations in Tiananmen Square in 1989 when Mr. Li was a sophomore, causing his college campus to be shut down. Mr. Li is mum on the events that followed, saying only that he was apolitical. But he does say that a year later he started thinking of studying abroad and that by the time he graduated in 1991 he was ready to leave his homeland.

“China was a depressing place,” he says. “I thought there was no hope.”


He applied to the top three graduate programs in computer science in America, but did not get into any of them (perhaps, he says, because China was considered an also-ran in technology). “I blindly sent out 20 applications,” he says. “SUNY Buffalo was the only program willing to give me a fellowship.”

He enrolled at Buffalo planning to earn a Ph.D. in computer science but grew disillusioned with academia. He completed his master’s degree in 1994 and then joined a New Jersey division of Dow Jones & Company, where he helped develop a software program for The Wall Street Journal’s online edition. During that time, he also became enamored of the technology boom taking shape in Silicon Valley. He spent much of his time trying to solve one of the Internet industry’s earliest problems: sorting information.

A breakthrough came in 1996, he says, when he developed a search mechanism he called “link analysis,” which involved ranking the popularity of a Web site based on how many other Web sites had linked to it.

“The moment I created this thing I was very excited,” he says. “I told my boss and pushed him. But he wasn’t very excited.” Soon after, he attended a computer conference in Silicon Valley and set up his own booth to demonstrate his search findings.

William I. Chang, then the chief technology officer at Infoseek, met Mr. Li at the conference and recruited him to oversee search engine development.

“Robin is possibly the single most brilliant and focused person I know,” Mr. Chang says. “And his inventions, now widely adopted, are still the gold standards in Web search relevance.”

After Disney acquired the small fraction of Infoseek stock it did not already own in 1999, it shifted the company’s focus away from search and toward content, leading Mr. Li to form his own Internet company with Eric Xu, who had a Ph.D. in biochemistry and good contacts in Silicon Valley.

The partners raised $1.2 million from two Silicon Valley venture capital firms, Integrity Partners and Peninsula Capital, and with their seed money in hand flew to China and founded Baidu in a hotel room overlooking Beijing University’s campus. Nine months later, in September 2000, two other venture capital firms, Draper Fisher Jurvetson and IDG Technology Venture, pumped another $10 million into the startup.

So it was that on the eve of the Internet bubble bursting in the United States, Baidu took off in China.

“When I came back I was prepared for a rough life,” Mr. Li says. “It turns out it wasn’t so bad.”

Baidu started out offering search services to other Chinese portals before developing its own stand-alone search engine. Some members of Baidu’s board of directors opposed the shift, saying it would turn customers into competitors. But Mr. Li said he sensed a shift in the market after watching the success of Overture, a company in Pasadena, Calif., that sold advertising space correlated with search results (which meant, for example, that ads for dental clinics might pop up next to search results for cavities).

“We were skeptical about search,” says Scott Walchek, a partner at Integrity Partners and a member of Baidu’s board. “But we weren’t as smart as Robin. Robin said he had a unique opportunity to build a brand around search. And he was right.”

In September 2001, Baidu began its own site — Baidu.com — which looked almost exactly like Google’s no-frills home page. And even before Google did it, Baidu allowed advertisers to bid for ad space and then pay Baidu every time a customer clicked on an ad. Small and medium-size companies loved it, the site became deluged with traffic and Baidu turned a profit in 2004. By then, Mr. Li was pushing for an initial public offering in the United States, insisting it would be a huge branding event for a company that had come to be called “China’s Google.”

BAIDU went public on Aug. 5, 2005, at $27 a share. When trading ended that day, shares of Baidu closed at $122, up 354 percent, the biggest opening on Nasdaq since the dot-com peak in 2000. Suddenly, Baidu was a $4 billion company and Mr. Li held stock worth more than $900 million. But not everyone cheered. Many analysts said that by almost every measure Baidu’s stock was ridiculously over-valued. It eventually tumbled to as low as $44 before rebounding. On Friday, its shares closed up $3.03 in regular trading, to $87.75, giving the company a market capitalization of about $2.94 billion.

At the time of the I.P.O., some critics attacked Baidu’s zealousness for ad revenues. They noted, for example, that a Baidu search for the word “cancer” turned up ads for hospitals that paid for top spots in results rather than returning information on cancer itself. In comparison, Google and Yahoo more clearly separate ads from relevant search results by placing them on the right side of the page.

The company’s revenue jumped 190 percent in the first half of this year, to $40.9 million; profit soared 550 percent, to $11.7 million. Baidu’s Web site is drawing millions of young people eager to download music files, create blogs or search for pictures of China’s “10 Most Beautiful Women.” While Baidu is growing fast, its revenue is still anemic compared with Google’s, which is expected to top $7 billion this year.

Analysts say Baidu is playing to a different audience than Western Internet companies because the Chinese are far more interested in entertainment than news, books or car rental rates. “The fact is 70 percent of China’s Internet users are under the age of 30,” says Richard Ji, an analyst with Morgan Stanley. “Most of them are single, only children. They’re looking for entertainment.”

That may explain why China’s dominant Internet companies are all entertainment focused, like Tencent (which hosts online communities and instant messaging) and Netease and Shanda (which are online gaming sites).

Yet no Internet company in China is growing as fast as Baidu, which had more than 50 percent of the pay-per-click market in the first half of year, up from a 37 percent share in the same period a year ago, according to Analysys, a research firm in Beijing. Google and Yahoo both lost ground, with each company holding 16 percent pay-per-click shares for the first six months of 2006.

Still, Baidu faces significant challenges. The company’s stock is in the stratosphere, putting pressure on management to deliver knockout growth every quarter. Google’s shares closed up $5.90 Friday in regular trading, to $409.88, meaning investors pay a hefty $60 for every $1 of profit in the stock, far more than other Internet companies. But Baidu investors pay a whopping $190 for every $1 of profit.

Baidu also faces legal challenges, including lawsuits claiming it violates copyright laws on music files. Baidu has been sued over the issue, but continues to provide links to sites that offer music files. The company says it does not believe it should be held responsible for simply offering linking to other sites. In a country rampant with claims of click fraud, a Beijing hospital recently claimed that Baidu orchestrated a scheme in which a Baidu affiliate kept clicking on the hospital’s ads to fatten the fees it had to pay Baidu. A Baidu spokeswoman says the company has not reviewed the case, but actively polices click fraud.

LOOMING on the horizon are Google and Yahoo. Google says it plans to spend hundreds of millions of dollars to compete in China, and Yahoo has merged its operations here with Chinese Internet behemoth Alibaba.com.

“Google is fierce,” Morgan Stanley’s Mr. Ji says. “And Alibaba has the best sales force. Baidu could get hurt on the technical side.”

But the Chinese market is littered with the wreckage of American Internet companies that have failed to dominate here. In 2003, eBay bought the largest Chinese auction company — and then lost market share. In 2004, Amazon bought the largest Chinese online merchandiser — and then lost market share.

Now, the real fight begins. Google, which invested $5 million in Baidu just before its public offering last year, sold that stake for a hefty $60 million in June. And now, Google is building up a huge research team in Beijing, not far from Baidu’s headquarters. But analysts say it won’t be easy for Google.

“The American Internet giants are dominant in the U.S. and dominant in Europe,” Mr. Brueschke at Citigroup says. “And then they come to China and fail. And so what I want to know is: What is Google going to do differently?”

For his part, Robin Li seems undaunted.

“Our traffic keeps increasing,” he says confidently. “We’re now the No. 1 Web site in China.”

Chinese search engine Baidu hails Barack Obama’s Web cred

May 20th, 2008
April 8, 2008 7:45 AM PDT

by Caroline McCarthy

U.S. presidential candidate Barack Obama appears in cartoon form on the logo of Chinese search engine Baidu.

(Credit: Baidu)

Chinese-language search engine Baidu has an unusual new mascot atop its home page: U.S. Democratic presidential candidate Barack Obama.

A cartoon version of Obama is depicted next to a donkey, the Democratic party emblem. He’s holding a net as though casting it, and attached to the end of the net is a computer mouse–get it? It’s the Internet.

This is part of a “person of the month” feature that Baidu has instituted since November, the blog Shanghaiist explains. Each month, Baidu selects a real-life or fictional personality who has ranked high in its search queries. As Shanghaiist explains, it’s “a bit like Google Trends meets Time Person of the Year on a monthly basis.” Barack Obama is the sixth installment in the series.

The series is hosted on the domain renwu.baidu.com; “renwu” means “historically important person.”

While the biography of Obama on Baidu is largely celebratory, this is not a formal endorsement of the candidate. It is, however, an endorsement of his Web-savviness. Clicking on the Obama-adorned logo on Baidu redirects to a Chinese-language biography of the candidate and links to various media; the central talking point is Obama’s status as a young politician who has successfully leveraged digital media and the Web to rise to fame. Of particular note, according to his Baidu page, is his speech about race in Philadelphia that soared to the YouTube stratosphere after appearing on television earlier.

But of more local relevance, the Baidu site about Obama also highlights the high volume of Chinese search queries for both Obama and his Democratic rival, Hillary Clinton. Charts and graphs detail politics-related searches both Chinese and international. There are also information resources pertaining to what the U.S. presidential election means to China, and what Chinese citizens think about it.

“State and world affairs have become the most popular topics of concern for Internet users,” a translation of part of Baidu’s page about Obama reads. It doesn’t seem to mesh particularly well with the Chinese government’s rigid stance on the spread of information, particularly political rhetoric, on the Web.

Nor was it clear whether the Obama campaign would react positively, considering the tense relationship between the U.S. and China. Calls to the campaign’s press office for comment were not immediately returned.

Baidu moves into online games

May 20th, 2008

 

 

www.chinaview.cn 2008-04-23 14:17:48   Print
 
    BEIJING, April 23 -- Baidu.com Inc Tuesday outlined its moves to penetrate the online game sector in China.
    The country's No. 1 Internet search engine provider has already announced expansion into the instant messaging and online auction business.
    Through cooperation with five game operators, including Shanda Entertainment, Baidu launched its game site.
    It is initially offering six browser games: Zongheng Tianxia, Tiankong Zuo'an, Fangbianmian Sanguo, Luanwu Chunqiu, Empire, and XBA Manager, which are free.
    "The games are Web-based, therefore they don't require high-standard computers," Baidu said in a statement. "The games on Baidu's platform are green and healthy, without too much blood."
    Zongheng Tianxia was developed in conjunction with Shanda, and Tiankong Zuo'an was developed with Beijing-based developer Huancheng Interactive. The other four games are operated in partnership with Beijing Xin Yu Brothers Internet Technology, operator of 51wan.com. Each game has a dedicated section.
    China's online game market revenue was 12.8 billion yuan (1.83 billion U.S. dollars) in 2007, and the figure will hit 40.1 billion yuan in 2011, according to Analysys International, a Beijing-based IT consulting firm.
    It's another move for Baidu to become a more diversified firm, industry insiders said.
    Baidu's new services aim to improve user loyalty and profitability of the company's core search business, according to Robin Li, Baidu chief executive and chairman.
    Baidu Hi, its new instant message tool, has been in public testing, and Baidu's auction Website will debut this year, Li said.
    Baidu, seeking to be different from Google, aims to be an online community offering other functions besides its core search advertising business, US-based investment bank Piper Jaffray said.
    (Source: Shanghai Daily)

Is Your Business Visible In China?

May 17th, 2008

If you are trying to enter the websites below , and if you are sitting under the blue sky of China, you may not be able to even glance at them for a second.

Del.icio.us http://www.del.icio.us.com

Newsvine.com http://www.NewsVine.com

Scribd.com http://www.scribd.com
Technorati http://www.technorati.com

But why? Let’s listen to AC-Baidu’s answer.

For many reasons, foreign businesses often are invisible to China’s 200 million Internet users.

Two major reasons are:

  • Many foreign businesses’ websites are not accessible in China. ( Read More )
  • Baidu normally does not include foreign businesses’ websites in its search results ( Read More )

Is your business visible in China ? Find out now

 

Looking Back to 2007.

May 15th, 2008

Looking back, the road of Baidu was bright, so what about the future?

Jul. 12, 2007 at 12:17pm Eastern by Chris Sherman

An Inside Look At China’s Internet Population

Deborah Fallows, Senior Research Fellow, Pew Internet & American Life Project, has just published a fascinating report detailing the demographics of Chinese internet users. Deb, an American currently living in Shanghai, notes that “there are now an estimated 137 million internet users in China, second in number only to the United States, where estimates of the current internet population range from 165 million to 210 million. The growth rate of China’s internet user population has been outpacing that of the U.S., and China is projected to overtake the U.S. in the total number of users within a few years.”

The implications of this growth are huge, for the Chinese people and everyone else in the world. This should be a must-read report for both searchers and search marketers alike. An abstract of the report, with a link to the full paper, is here.

———————————————–

Mar. 6, 2007 at 2:49pm Eastern by Chris Sherman

Report: Google Gaining, But Baidu Still Dominates In China

Reporting from the Fourth Annual Piper China Growth Conference, analyst Safa Rashtchy says that China-based search engine Baudu continues to dominate in market share for both organic and paid listings, but apparently Google’s increased investments in China are paying off. Baidu also believes the opportunity in Japan will be significant longer term and they believe they have local market advantage vs. U.S. players. Video sharing sites are also seeing strong momentum, though there is no clear leader in China as yet.

 

                                                                                                             From http://searchengineland.com

Fragrance Market Is Establishing a Foothold in China

May 10th, 2008

Alan Chin for The New York Times

The Anna Sui perfume counter at a shopping center in Beijing. Western-type perfumes have been produced in China only since the mid-1980s.

Published: May 10, 2008

One of China’s hottest sellers is a nonessential Western luxury product that the Chinese have historically never bought and that has virtually no Chinese cultural roots: perfume.

to know more about this click http://www.nytimes.com/2008/05/10/business/worldbusiness/

10perfume.html?pagewanted=1&_r=1&adxnnl=1&ref=worldbusiness&adxnnlx=1210399366-BMxTxzwHbp7fXV1HmC2ghw

With perfume sales in much of the rest of the world slowing or declining, the industry, primarily based in Paris and New York, hopes for significant growth in China. The market there remains small, though sales are rising exponentially. Nobody knows the exact growth rate, but Patrick de Lambilly, the vice president for Asia for Coty, says, “You can see 20, 30, and 40 percent a year.”

Alexandre de Chaudenay, Asia-Pacific managing director of the perfume licensee Beauté Prestige International, said, “I’d say 20 to 40 percent seems correct, but the figures are extremely difficult, and people tell you anything.”

Still, even if the Chinese market is potentially hugely lucrative, doing business there is far from easy. The regulatory system is uncertain. The complexity of its bureaucracy is daunting. The department stores are of varying quality, and because Chinese tastes are changing rapidly, a store that attracts crowds one day can be deserted the next.

To add to the uncertainty, many in the business say the concept of perfume is so new that a lot of Chinese consumers are, in fact, not buying a perfume but rather the brand to which a bottle of perfume happens to be attached. “China is about brand, brand, brand,” Mr. de Chaudenay said.

And the importance of brand raises the question of the market’s future stability. Although many in the industry talk about the strength of the luxury brands in China, “Are those brands’ perfumes selling well?” Mr. de Chaudenay asked. “I think so. Are the consumers coming back? We don’t know.”

For that reason, Mr. de Lambilly says his perfume company and others are tempering their enthusiasm for the Chinese market with realism. “We’re learning as we go,” he said. “Particularly in fragrances. All of us here are doing the same thing: getting data from the marketing sources, comparing it to other sources, trying to figure it out.”

Hans Wohmann, head of Procter & Gamble’s Asian operations for scent, said sales in China of what are known as “prestige fragrances” — perfumes made by designers and luxury houses like Chanel, Estée Lauder and Dior — were around $120 million versus the $9 billion European market or the $4 billion American market. Even the Japanese market, the largest in Asia, was $500 million in 2006.

As Mr. Wohmann put it, “So 20 percent of the world’s population has only 1 percent of the global fine fragrance market.”

Perfume is a relatively recent phenomenon in China. Mr. de Lambilly said the Chinese started using scented shower products only in the early 20th century. But they were light and simple, he said. “They were for freshening the body and also to avoid mosquitoes.”

Western-type perfumes have been produced in China only since the mid-1980s, said Bill Jin, manager at the PearlChem Corporation in Parsippany, N.J., an importer and distributor of perfume raw materials.

Ralf Ritter, a consultant to the scent maker Takasago, said he would be “surprised if even 50 percent of the perfume bought in China was actually used.” And that, he said, is largely because in China fragrances serve multiple purposes. “They’re fragrances, but they also repel mosquitoes, they have moisturizing properties, and they are used in the summer to freshen up,” he said. “Chinese consumers care that the product does more than just fragrance the body.”

Mr. Jin says there are a just a few local perfume brands. Pearlscent, the sister company of Mr. Jin’s company, based in Guangzhou, is one. “The fragrance concentrates are mainly created by our customers in the U.S. or France and imported from the U.S.A. or Europe.” They are then mixed with alcohol, bottled and sold in China.

Mr. Jin adds that there is virtually universal agreement that Chinese brands will not pose serious competition to Western brands until well in the future. “High-end brands like Dior and Chanel will be for the prestige consumer, which is completely different from the local brand market,” he said. “One bottle of Chanel perfume will cost almost a half month pay for a fresh-out-of-college student.”