Baidu fighting to rescue its reputation

medical and milk ads

[redstorm]

Chinese search giant Baidu received lots of suspicions and critics from the outside world leading by China Central Television(CCTV) as well as its main competitor Google last week for its so-caled "Baidu Bidding Ranking" program. Some even filed the lawsuit to the local court for a justified answer.
Baidu responsed promotely on this issue: it has closed the bidding ranking campaign on some quarrel-generating keywords and strengthed the governing policies on its Bidding Ranking Program.
It's said more remedial measures will be carried out to regain its high public recognization.

[bill]

That's interesting redstorm. Thanks for the update.

Does this mean that the public are becoming concerned with the SERPs, or is this just a concern of advertisers?

What sort of issues were raised by CCTV?

[redstorm]

Hi, Bill:
CCTV criticized Baidu for the fraud on its bidding ranking program: Baidu only wants money and paid little attention to check the legal status of its bidding ranking advertisers.

[bill]

So Baidu's overall reputation is taking a hit. Do you think that would influence the general public to consider looking at alternative search engines?

[redstorm]

Do you think that would influence the general public to consider looking at alternative search engines?

I'am afraid not, unless Google can catch up! But according my own study, Google can't catch up with Baidu in the next 1-2 years. Google don't know the market, what's more, it's too bureaucracy as a multi-national company. Kai-fu Lee is a great leader, but the lagged system restricted him. Please don't ask me more! :)

[bill]

I'm starting to see more about this incident and apparently it has affected Baidu's share price:

Baidu shares sink, analyst cites Chinese TV report [forbes.com]

U.S.-traded shares of Chinese search engine operator Baidu.com Inc. sank Monday - a drop one analyst attributed to a report by China's state television network that Baidu may have let unlicensed health clinics buy popular medical ad keywords on its search engine.

American Depositary Shares of Baidu fell $45.11, or 25.2 percent, to $133.78 in afternoon trading. Earlier, the stock traded as low as $130.51 - its cheapest price since May 2007.

Sterne Agee & Leach analyst James Lee said Monday that a report by CCTV over the weekend into medical malpractice in China indicated some consumers may have found their way to improperly licensed or unlicensed private clinics and health centers via advertisements that came up when they searched for health-related topics on Baidu.

[bill]

Baidu's Blows Could Be Google's Gold [ecommercetimes.com]

Could the damage to Baidu's reputation give Google a new opportunity to strengthen its position in the Chinese search advertising market?

"It's possible that it will," Mastin told the E-Commerce Times. "The concern would be that Chinese consumers will view Baidu's results as less pure than Google's, or more censored or more altered."

[bill]

An interesting editorial on this issue that gives some more background:

China's Baidu.com: Drugged And Screaming For Better Management [chinatechnews.com]

While we do think that overseas investors and analysts have phenomenally overreacted to this issue — and they truly fail to comprehend the tricky issues waiting still to be uncovered in most advertising-driven businesses operating in China — we do think that the ultimate beneficiary of all this hubbub is the Chinese consumer, who has suffered enough the past year through medicine, toy, and milk recalls. Once again, the media has provided a counterbalance to the "running dog" greed of big businesses like Baidu.com.

[flymore]

Baidu's Staff don't check the legal status of its bidding ranking advertisers, for example, medical,cancer... They are deliberate just for money and money.

[bill]

That makes sense actually. According to a lot of the reports Baidu wasn't actually doing anything illegal. There were no laws in China stating that Baidu could or could not accept ads from these sorts of organizations. Baidu also didn't have the responsibility to determine whether these organizations were legitimate.

[engine]

Baidu Overhauls Operations After Search Scandal [tech.yahoo.com]

China's Internet search leader Baidu said on Friday it will overhaul operations after state media said it allowed unlicensed medical services to buy high search rankings to win more customers.

Nasdaq-listed Baidu was accused on a state television show this month of letting the unlicensed services pay for prominent positions on its pay-for-performance (P4P) search platform, netting them more "clicks" for expensive but useless treatments. The claims sparked widespread public criticism of the Chinese search giant and dragged down Baidu's stock. And now Baidu's chief executive officer, Robin Li, has promised action.

"We have removed the key words of all four clients mentioned in the report and have begun to double-check the licenses of all other hospitals and pharmacies on our client list," Li told the official Xinhua news agency.

[Alcoholico]

Baidu's Staff don't check the legal status of its bidding ranking advertisers, for example, medical,cancer... They are deliberate just for money and money.

And.... does google check?

[koan]

So Baidu's overall reputation is taking a hit.

According to a lot of the reports Baidu wasn't actually doing anything illegal.

Doing the right thing even when there is no law forcing you to do so helps create a good reputation. In a world where consumers are not locked-in (ex: Oil, MS Windows, etc) and can easily switch to another service provider, reputation is important.

[johnnie]

It might be legal, but if SERP quality tanks as result, thy will lose major business to G.

[JS_Harris]

I doubt that johnnie, the average Joe doesn't care about such things and uses the search engine packaged by default with their computers browser. I highly doubt anyone would refuse to use Baidu over this, if anything they'll remember the name and use it more often.

Getting a search engine packaged into the most widely used browser which is then installed on new computers is the primary force deciding the level of success for any search company. Everything else is incremental at best... bad press included.

[willybfriendly]

Getting a search engine packaged into the most widely used browser which is then installed on new computers is the primary force deciding the level of success for any search company. Everything else is incremental at best... bad press included.

Well then, that would explain why MS Live is so dominant in the field, wouldn't it...

Google did not become a verb because it was pre-packaged in the most widely used browser installed on new computers.

[enigma1]

Thing with baidu is that, at least in my case, would not behave properly crawling my sites.

For 3 months at least, where I monitored the logs, baidu will come in from different IPs and download the home page. And only the home page. Nothing wrong with that you may say. But then it would also ignore the cache headers the server sends for the home page, which clearly stated "keep content for 1 week", and instead it would repeat this same pattern 100 times every day. Every other popular spider respects them.

Home page in this case had a content of say 50KB, Lets see, 100 x 50 KB = 5MB b/w wasted from a single bot downloading the same page daily and not respecting (or understanding?) the cache.

End result is they're now banned by UA.

[nealrodriguez]

supposedly what started it all: "it was rumored that China’s search engine giant, Baidu accepted 3 million RMB from Sanlu to block out search results that consist negative images of the notorious milk company."

they dropped another site's ranking because they lowered the amount of money they were paying them for bid ranking; nothing i found made a distinction if bid ranking refers to ads or "organic" ranking;

if it's for ppc or pay per action ads, i don't know what's the issue;

[bill]

It sounds like it could get worse for Baidu if this related case goes through:

Baidu may be accused of monopoly [chinaknowledge.com]

Baidu.com Inc<BIDU>, the leading Chinese search engine, may face legal charges for breaching the anti-monopoly law by the end of this month, the China Daily reported.

A Chinese lawyer, who filed the first complaint under the new anti-monopoly law against Baidu in October, intends to sue Baidu for "abusively" using its dominant position by blocking websites that refused to pay for listings in the search results.