Investors are betting that Baidu will soak up much of Google’s 30-odd per cent market share in China

The big winner from Google’s challenge to the Chinese Government is the home-grown internet superstar Robin Li, whose Baidu search company yesterday hit a record high on the Nasdaq stock market.  Shares in Baidu, which dominates China’s $1 billion search market with a share of more than 60 per cent, rose 5.6 per cent to $464.23. The stock closed up 12 per cent on January 13th.  Investors are betting that Baidu will soak up much of Google’s 30-odd per cent market share. If Google stays in China, Baidu will be in a strong position to sign up advertisers worried about working with Google.

BAIDU is a Web winner:  1999 – $1.2m Initial funding raised to set up Baidu.  Today – $16bn Baidu market capitalization.  354% Rise in Baidu shares on their Nasdaq debut in August 2005.  Estimated personal worth of founder Robin Li.  Mr Li, 41, is a big name in China, an internet entrepreneur who has beaten Google at its own game. He was born in Shanxi province in 1968 and gained a degree in Information Management from Peking University in 1991 and received a master in computer science from the State University of New York at Buffalo in 1994.  Baidu has about 300 million visitors and a market value of about $16 billion. Mr Li’s share gives him a personal fortune valued at nearly $2.9 billion, according to Forbes in November. Baidu became successful by closely responding to local tastes and willingly co-operating with government censorship efforts. It built up a commanding lead in search market share after government filters slowed access to Google’s US-based site. It has held on to that advantage by representing itself as the canny local service outsmarting foreigners.

Baidu also offers a host of other internet services, including chat rooms, social networks and security software. The company dominates music search in China, providing links to websites that critics say offer illegal downloads. It is unclear whether Beijing tries to promote the site over foreign rivals. In 2006, Baidu launched a Chineselanguage encyclopaedia inspired by Wikipedia after access to the US site was blocked, possibly because it has articles about Tibet, Taiwan and other sensitive topics.  Source: Business Times Online UK

BIIA Newsletter February 2010 Issue