Google vs. Baidu

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Friday, February 5th, 2010
Google vs. Baidu

The battle of search engines has been underway in China for quite some time. China's main search engine Baidu and it is the fourth biggest website in the world. It has a market value of US$3 billion, but is it able to keep up with Google. Google has accumulated 65 percent of the US search traffic. This made it the number one web site in the world, with 157 Million US visitors. It is a testing time for the Chinese as well. With China's variant of market socialism with its totalitarian political set up still hold up? Is Google able to withstand the competition from Baidu? Which search engine is the sure thing?

Yes

For the west Google represents openness, truth and unfiltered information access. One of Google's mantras is ‘you can make money without doing evil'. This is how Google makes their revenue by generating it from offering search technology to companies and from the sale of advertising displayed on Google's site. The presence of Google in China has always been regarded as motivation for Chinese Internet businesses and efforts to innovate. Cash is king and Google sits high on this throne.

Google's share of the Chinese market has risen markedly in recent years, to 35.6 percent in 2009. Nevertheless, the market share in China is too, big to quit due to the fact the China will have the most Internet users in the world. Google has lower risk proposition delivering a potentially higher reward, making it the better choice.

No

Two thousand nine was a good year for Baidu which boasted a 58.4 percent market share. If Google steps out of China, Google's 30 percent share will be re-distributed between the other three main players Yahoo, Bing and Baidu, but most likely, Baidu will take the remaining shares. Baidu has the major chunk of advertising with 59 percent while Google has 30 percent. China needs foreign companies like Google for technological creativity. China has done a superb job of developing its manufacturing sector, but the country still does not compare when it comes to technological innovation. Although Baidu, will immediately benefit when Google vanishes. Baidu in fact has 73 percent of China's 338 million users and has captured most of the Chinese search. Also, Baidu has announced a deal with mobile carriers to test mobile applications.

These facts are good, but Baidu still has many unknown variables to make it the sure choice. The main example is when do you know if insiders are selling their own shares or what if the government takes control of Baidu?