Wall Street Journal
BEIJING—Baidu Inc., owner of the most popular Web site in China, isn't known for ground-breaking innovation. From the Google-esque look of Baidu.com's main page to its Wikipedia-like encyclopedia to a question-and-answer service that's similar to Yahoo Answers, the Chinese Internet search company has long been tarred by critics as unoriginal.
But Baidu also is an example of how many Chinese technology companies manage to outfox foreign competitors by tailoring existing technologies to China's growing and fast-changing market. While that may not earn them respect as global innovators, their understanding of the Chinese consumer has allowed many of them to beat bigger foreign rivals at their own game in China, home to the world's largest number of Internet users.
Baidu dominates China's Internet search market, holding a 61% share of industry revenue in the second quarter, compared with 29% for Google Inc., its biggest Internet-search competitor.
While that is partly the result of regulatory issues and loose enforcement of copyright protections in China that have enabled Baidu to provide access to unlicensed music downloads through its site, it also is the result of subtle but effective distinctions on its pages and of popular tools like Baidu Post Bar, an online message board that lets users create discussion topics.
For a long time, the search bar on Baidu's main page was longer and wider than Google's, says Liu Ning, a Beijing analyst with research firm BDA China Ltd. "This makes a difference for Chinese users, because Chinese characters are much more complex than English letters, and it helps to be able to see them more clearly," says Mr. Liu.
Post Bar, meanwhile, represented an early recognition by Baidu that many Chinese Internet users are drawn to online forums. Unlike some similar online forums where moderators predetermine the categories for discussion, Post Bar lets users easily create their own categories as hot topics develop and find related posts through keyword searches. This function is popular in China.
But Baidu also is an example of how many Chinese technology companies manage to outfox foreign competitors by tailoring existing technologies to China's growing and fast-changing market. While that may not earn them respect as global innovators, their understanding of the Chinese consumer has allowed many of them to beat bigger foreign rivals at their own game in China, home to the world's largest number of Internet users.
Baidu dominates China's Internet search market, holding a 61% share of industry revenue in the second quarter, compared with 29% for Google Inc., its biggest Internet-search competitor.
While that is partly the result of regulatory issues and loose enforcement of copyright protections in China that have enabled Baidu to provide access to unlicensed music downloads through its site, it also is the result of subtle but effective distinctions on its pages and of popular tools like Baidu Post Bar, an online message board that lets users create discussion topics.
For a long time, the search bar on Baidu's main page was longer and wider than Google's, says Liu Ning, a Beijing analyst with research firm BDA China Ltd. "This makes a difference for Chinese users, because Chinese characters are much more complex than English letters, and it helps to be able to see them more clearly," says Mr. Liu.
Post Bar, meanwhile, represented an early recognition by Baidu that many Chinese Internet users are drawn to online forums. Unlike some similar online forums where moderators predetermine the categories for discussion, Post Bar lets users easily create their own categories as hot topics develop and find related posts through keyword searches. This function is popular in China.
A Chinese Feel
Baidu isn't the only company that has benefited by taking existing technologies or ideas and giving them a Chinese feel.
Tencent Holdings Ltd., based in Shenzhen, popularized instant messaging in China by pairing the service with online games and blog hosting—heavily used applications in China—and by rewarding users for high usage with points that could be exchanged for prizes. Now, the Hong Kong-listed company has robust online game and music platforms, a massive social-networking site and a bigger market value than Yahoo Inc.—about $35 billion versus $25 billion.
Alibaba Group's e-commerce site Taobao.com, meanwhile, uses a model that appears similar to eBay Inc.'s online-auction model. It added an instant-messaging service that allows buyers and sellers to haggle over prices, similar to the way business is conducted offline in China. Taobao is now the primary destination for online shopping in China, with almost $12 billion in transactions in the first half of this year. EBay shut its own Web site in China and replaced it with one majority-owned by local player TOM Online Inc., a unit of Hong Kong-based TOM Group Ltd., but still has only a tiny fraction of the market.
Baidu and these other companies have taken advantage of the fact that foreign firms often struggle to adapt their businesses for the Chinese market.
Kai-Fu Lee, the executive who ran Google's operations in China from the time the company entered the market in 2005 until he resigned in September, says the firm's challenges included simply coming up with a name that Chinese people could pronounce. "Google" is a poor fit for Chinese tongues, and the Chinese characters Google chose for its name, which are pronounced "goo guh," also got a poor reception. In 2007, Google created a shortened version of its Web address for Chinese users that is easier to remember, in any language: G.cn.
Baidu, founded in 2000 by Chinese-born Silicon Valley veteran Robin Li, portrays itself as the true Chinese choice in Internet search. Baidu says on its Web site that its name—whose characters mean "hundred" and "degree"—was inspired by an 800-year-old Chinese poem because it "wants the world to remember its heritage" and that "Baidu focuses on what it knows best—Chinese-language search."
Some of Baidu's products, however, look remarkably similar to those invented by others. Its question-and-answer service, Baidu Knows, allows users to post questions about anything that can be answered by anyone. And just like Yahoo Answers, users can vote for the responses they think are most useful. One popular recent question on the Baidu site was: "What is the most expensive food in the world?" The most popular answer: "the gold foil used to decorate chocolates and other foods."
Baidu Encyclopedia, meanwhile, has been accused by Wikipedia users and the nonprofit Wikimedia Foundation, which runs the Wikipedia site, of having some entries that appear to copy Wikipedia entries word-for-word, without credit. Still, Baidu Encyclopedia now has close to two million articles, compared with the less than 300,000 on Chinese Wikipedia.
Baidu has benefited from the fact that censors periodically block content from the Wikipedia site, which isn't licensed in China. Baidu has had few problems with censorship because it restricts content that might draw fire from the government, such as information related to Tibetan independence. While Google does the same—a decision that drew international criticism—its content has often been blocked by censors, and users redirected to a page containing a Baidu search box.
'Just a Feeling'
Baidu isn't the only company that has benefited by taking existing technologies or ideas and giving them a Chinese feel.
Tencent Holdings Ltd., based in Shenzhen, popularized instant messaging in China by pairing the service with online games and blog hosting—heavily used applications in China—and by rewarding users for high usage with points that could be exchanged for prizes. Now, the Hong Kong-listed company has robust online game and music platforms, a massive social-networking site and a bigger market value than Yahoo Inc.—about $35 billion versus $25 billion.
Alibaba Group's e-commerce site Taobao.com, meanwhile, uses a model that appears similar to eBay Inc.'s online-auction model. It added an instant-messaging service that allows buyers and sellers to haggle over prices, similar to the way business is conducted offline in China. Taobao is now the primary destination for online shopping in China, with almost $12 billion in transactions in the first half of this year. EBay shut its own Web site in China and replaced it with one majority-owned by local player TOM Online Inc., a unit of Hong Kong-based TOM Group Ltd., but still has only a tiny fraction of the market.
Baidu and these other companies have taken advantage of the fact that foreign firms often struggle to adapt their businesses for the Chinese market.
Kai-Fu Lee, the executive who ran Google's operations in China from the time the company entered the market in 2005 until he resigned in September, says the firm's challenges included simply coming up with a name that Chinese people could pronounce. "Google" is a poor fit for Chinese tongues, and the Chinese characters Google chose for its name, which are pronounced "goo guh," also got a poor reception. In 2007, Google created a shortened version of its Web address for Chinese users that is easier to remember, in any language: G.cn.
Baidu, founded in 2000 by Chinese-born Silicon Valley veteran Robin Li, portrays itself as the true Chinese choice in Internet search. Baidu says on its Web site that its name—whose characters mean "hundred" and "degree"—was inspired by an 800-year-old Chinese poem because it "wants the world to remember its heritage" and that "Baidu focuses on what it knows best—Chinese-language search."
Some of Baidu's products, however, look remarkably similar to those invented by others. Its question-and-answer service, Baidu Knows, allows users to post questions about anything that can be answered by anyone. And just like Yahoo Answers, users can vote for the responses they think are most useful. One popular recent question on the Baidu site was: "What is the most expensive food in the world?" The most popular answer: "the gold foil used to decorate chocolates and other foods."
Baidu Encyclopedia, meanwhile, has been accused by Wikipedia users and the nonprofit Wikimedia Foundation, which runs the Wikipedia site, of having some entries that appear to copy Wikipedia entries word-for-word, without credit. Still, Baidu Encyclopedia now has close to two million articles, compared with the less than 300,000 on Chinese Wikipedia.
Baidu has benefited from the fact that censors periodically block content from the Wikipedia site, which isn't licensed in China. Baidu has had few problems with censorship because it restricts content that might draw fire from the government, such as information related to Tibetan independence. While Google does the same—a decision that drew international criticism—its content has often been blocked by censors, and users redirected to a page containing a Baidu search box.
'Just a Feeling'
Then there is Baidu's MP3 music-search service, which lets users search for songs and download or stream them directly through Baidu's Web site. While this is an innovation of sorts—analysts say Baidu was among the first sites to provide such a service—it is one that has generated criticism as well as user traffic, with the recording industry saying Baidu facilitates piracy by providing links to unlicensed versions of songs.
Baidu says it isn't doing anything wrong. "Baidu is dedicated to protecting intellectual property and will continue to act in compliance with relevant laws and regulations," a spokesman says.
Google this year began offering a music-search service that links users to licensed tracks. A spokeswoman says it is one of the "many unique and innovative products" Google has initiated for Chinese users. Google, she adds, will continue to seek ways to "provide a better user experience."
Even if Baidu's features aren't always original, some Chinese users say they don't care. "Google may have stronger innovations than Baidu, but some of their functions are not necessary for me," says Zhou Chanjun, general manager of a lighting company in Beijing. "I can't say why we think Baidu is more Chinese. It's just a feeling."
Baidu says it isn't doing anything wrong. "Baidu is dedicated to protecting intellectual property and will continue to act in compliance with relevant laws and regulations," a spokesman says.
Google this year began offering a music-search service that links users to licensed tracks. A spokeswoman says it is one of the "many unique and innovative products" Google has initiated for Chinese users. Google, she adds, will continue to seek ways to "provide a better user experience."
Even if Baidu's features aren't always original, some Chinese users say they don't care. "Google may have stronger innovations than Baidu, but some of their functions are not necessary for me," says Zhou Chanjun, general manager of a lighting company in Beijing. "I can't say why we think Baidu is more Chinese. It's just a feeling."
