Baidu plots overseas growth

27 May 2011

BEIJING: Baidu, China's biggest search engine, is looking to expand its presence in other countries as a means of driving future growth.

Speaking at a recent conference, Haoyu Shen, Baidu's senior vice president for operations, revealed the firm is creating a search service in 12 different languages.

"We're setting up this multi-language platform to get us more ready once we do decide to go to other markets," Shen said, as reported by the Wall Street Journal.

"For sure, we do have global aspirations. A lot of the company's growth in the next ten years will come from overseas expansion."

Baidu already runs a search engine in Japan, and although this property lags considerably behind Yahoo and Google, Shen asserted the Chinese company was committed to the country.

It has also partnered with Japanese counterpart Rakuten to launch an ecommerce site at home, but Shen suggested there were no further online retail schemes in development at present.

Indeed, Baidu has adapted Youa, one of its early efforts in this sector, into an offering based around providing localised advertising.

By contrast, Baidu "won't rule out" widening its relationship with Microsoft, with which it works on certain search projects in China, according to Shen.

Domestically, Baidu boasts a dominant position in the search category, holding a 75.5% share across the first quarter of this year, easily beating Google's 19.2%.

Shen argued the company was "pretty optimistic" about revenue prospects for 2011.

A possible contributor to this trend is the rising demand among advertisers keen to tap China's burgeoning web audience, reaching 457m people by the end of 2010, per official figures.

Supplementary objectives for Baidu include enhancing its status on the mobile internet, which possessed 303m users last year.

Analysys International reported Baidu took 36.1% of wireless searches in Q1, and Shen predicted it would "eventually" match its PC performance in an area of "huge opportunity".

"We are not there yet, but I think our share is growing ... very fast," said Shen.

Statistics released this week by the Government showed there are currently 900m mobile subscribers in China, and surging smartphone penetration could rapidly boost web use through this route.

Google has seen its overall search share contract in China after taking a stand regarding the censorship of results last year.

The US firm's 19.2% share during the first quarter of 2011 constituted a decline from 19.6% in the last three months of 2010, Analysys International stated.

John Liu, Google's vice president of sales, supported the idea that the trading environment was characterised by an intensifying rivalry.

"Competition is just reality. It's there," he said.

However, Liu added an emphasis on improving the customer experience and similar strategies should help the company going forward.
"You just focus on users, make them feel your search engine," he said. "With a lot of things put together, as long as a user learns it - you use it - market share will come and business will come back."

Data sourced from Wall Street Journal, Bloomberg, AFP; additional content by Warc staff