If you thought Google had trouble in China once the government
started filtering its search results, even worse news could be
ahead for leading local search hub Baidu. State-run news agency
Xinhua just opened its own official search engine in cooperation
with China Mobile (
). Search results are apparently filtered to better serve the
interests of Beijing: controversial topics do not show up, while
others are diverted to relatively innocuous sites. Not really going
to get the best search results on politics, right?
) left the country last year over what appeared to be a demand to
similarly sanitize its results for the Chinese government's
political comfort. At the time, the situation favored Baidu (
), which quickly grew to capture 75% of all of China's sprawling
web search traffic. As it is, BIDU and GOOG still have roughly 95%
of the Chinese search market wrapped up between them -- leaving the
dregs to a multitude of also-ran names reminiscent of the U.S.
"portal" crowd circa 1998 -- but the weight of official sponsorship
means a lot in China. The reach of CHL on the mobile platform is
also a significant advantage, given the relatively splintered
nature of phone-based search. Currently BIDU only has a 34% share
of mobile search, and getting the new site Panguso on all of China
Mobile's phones can easily help a newcomer ramp up share quickly.
Mobile phone users will also be able to tap into Panguso directly
and send search results to their PCs via SMS. A positive for CHL
which has an interesting chart (long term). BIDU shares are down
over 4% today in ADR form and are likely to decline in Shanghai
tonight in sympathy.