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Spotlight on China's Homegrown Search Giant

Revenues accelerate at Baidu

December 14, 2009 | Advertising & Marketing

Google is not on top everywhere. In China, homegrown search giant Baidu snaps up more than one-half of the market by catering to local needs.

According to Analysys International, search revenues in China reached RMB1.81 billion ($265 million) in Q2 2009 alone—a 33% increase over the previous quarter and a 47% increase over the same period the prior year. Baidu saw more than twice the share of those dollars as Google.

Search Engine Revenues in China, by Company, Q2 2009 (% of total)

Popularity in the world’s largest country has made Baidu the third-biggest search property in the world, according to July 2009 comScore qSearch figures. Nearly 8 billion searches were conducted on Baidu.

Top 10 Search Engine Properties Among Internet Users Worldwide, Ranked by Searches, July 2008 & July 2009 (millions and % change)

The Chinese search market is vastly different from those in the US and Europe, said Pali Capital analyst and managing director Tian Hou on Silicon Alley Insider. She explained that Baidu has been successful because it has tailored its sales and marketing efforts toward small and medium-sized businesses, providing support and even helping those without Websites create them.

The strategy seems to be working, as revenues continue to accelerate into Q4, according to company reports. Total revenues for Q3 were RMB1.28 billion ($187.2 million), a 39.1% increase over the same period of the previous year. Baidu also disclosed that it has an active catalog of 216,000 online marketers who spent an average of RMB5,900 ($864) in the quarter—also up both year over year and quarter over quarter.

Robin Li, Baidu’s chairman and CEO, attributed improved revenues to the implementation of the site’s new online marketing system, Phoenix Nest. The streamlined bidding system had been adopted by 70% of marketing customers as of Q3 and contributed 20% of overall revenues.

Baidu also may receive help by adhering to strict censorship standards set by the Chinese government, while some international sites have run afoul of the “Great Firewall of China” before. According to The Wall Street Journal, when Google was blocked briefly over the summer, users were automatically redirected to Baidu.

Keep up on the latest digital trends. Learn more about an eMarketer Total Access subscription, today.

Check out today’s other article, “Seven Predictions for 2010 from eMarketer’s CEO.”



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