Search engine market in China
When it comes to the Search Engine market share in China, Baidu plays a significant role among all the players. While Google is the market leader around most of the world, as for search engine traffic and search share, it only ranks fifth of all the search engines in China, and it held about 3 percent of the Chinese search market share in June, 2013, according to the latest data from Chinese Internet analytics company CNZZ.
In addition, Google currently only holds 2.13 percent of search traffic page views. Since Google left the Chinese search market back in 2010 and they are no longer active in the space, the decline isn’t that surprising. In China, search engine landscape is unique, and represents one of the few markets globally where Google does not dominate. The largest search engine in China is Baidu.
Globally, according to stat counter, Baidu is the world’s second largest search engine.
In China, Baidu is winning with a dominant market share of 73%, followed by Oihoo and Sogou.
Emergence of Quihoo, China’s second largest search engine
Interestingly, Baidu has also dropped its share, duo to a brand-new search engine that was launched less than a year ago. 360 Search (product of Qihoo Company) was launched as a direct competitor for Baidu and jumped to the second largest search engine in China, holding 16.6 percent shares (15.3 percent of page views) in June, 2013. So far, Qihoo’s new search engine product has been a huge success, which was valued at $4.4 billion last year according to Bloomberg. Consequently, Baidu’s market share is now slightly under 66 percent, down from a high of 81.6 percent the year prior, according to Tech in Asia.
On the top-five list, Sogou is in third place with 8.8 percent of the traffic share (9.3 percent market share), and Soso is in the fourth with 3.4 percent of traffic (3.9 percent market share).
Baidu: The Biggest Search Engine in China
Incorporated in 2000, Baidu is the world’s biggest Chinese-language Search Engine Provider, and a web services company headquartered in Beijing, China. It serves various types of online participants, such as individual users, corporate customers and Baidu union members. As a young company, Baidu developed rapidly in the past years. In October 2012, Baidu ranked 5th overall in the Alexa Internet rankings, following Facebook, Google, YouTube and Yahoo!.
The core business of Baidu is the search engine. Yanhong Li, the CEO of Baidu, developed the RankDex site-scoring algorithm for search engines results page ranking and has received a US patent for this technology. He later used the technology for Baidu search engine. The company offers multimedia content including MP3 music and movies. The company is also the first in China to offer Wireless Application Protocol (WAP) and personal digital assistant (PDA)-based mobile search.
It designs and delivers its online marketing services primarily on its Baidu.com to its online marketing customers. By December 31, 2011, it had approximately 488,000 active online marketing customers. Its online marketing customers consist of small and medium enterprises (SMEs) throughout China, large domestic companies and Chinese divisions or subsidiaries of large, multinational companies.
Baidu’s search technology
Baidu’s key technologies are its Web search and advertising technology. When it comes to search engine models, Baidu adopts the Hyperlink Vector Voting (HVV) method, which adds a qualitative dimension to its rankings by factoring the number and descriptions of hyperlinks to the document. HVV is a new method of indexing and retrieving hypertext documents, and it uses the content of hyperlinks to a document to rank its relevance to the query terms. To provide intelligent, relevant search results for the tens of billions of queries that are entered into Baidu’s search platform every day, the company focuses on powering effective technology optimized for up-to-date local tastes and preferences. Their deep understanding of Chinese language and culture is central to the success, and this understanding allows them to tailor their search technology for Chinese language users’ needs. For example, there are at least 38 ways of saying “I” in the Chinese language, and Baidu’s search engine can recognize these nuances to effectively produce relevant results.
How Baidu Makes Money
As for its advertising technology, In November 2008, Baidu announced the development of “Phoenix Nest”, a new keyword sealed auction system, which provides customers with more keyword choices to bid on, more tools for budget management and more data for the effective measurement of ROI. According to latest quarterly report, 70% of all customers already use Phoenix Nest. The various choices can help customers to meet their marketing needs and to better manage their accounts and data for analyzing and optimizing ROI.
The Future of Baidu
The Internet search industry in China is highly competitive and rapidly evolving. Baidu’s main competitors are U.S.-based Internet search providers that provide Chinese language Internet search services (for example, Yahoo! China) and Chinese Internet companies (Sina, Sohu, Netease, Tencent). As discussed before, Qihoo is currently developing faster than Baidu in the search business, and cutting into Baidu’s market share.
In order to keep its market share in the industry, Baidu needs to continue to innovate. According to their latest annual report, the company has recognized the need and seems committed to high R&D expenditures. In addition, uncertainties still exist with respect to the liability of Internet search providers that provide links to third party content that infringes upon others’ copyrights, which could open Baidu up to expensive litigation. Therefore, it’s time for the company to face these problems in time and come up with effective solutions.
If you are interested in social media landscape in China, check out our recent blog post on Sena Weibo: Social Networks in China: 10 Marketing Tips How to Win on Sina Weibo