Baidu Facing Large Joint Lawsuit on the Horizon

• Baidu, China’s #1 search engine with 70% market share (vs. Google’s 26%) is facing an upcoming joint lawsuit by as many as 100 companies who are tired of the search engine’s monopoly status and bullying tactics.
• The root of the problem lies within Baidu’s advertising system. Unlike Google which separates paid search results from organic, Baidu mixes paid results seamlessly into organic results making impossible to tell the difference between the two without checking hyperlinks (paid results are precluded with http://baidu.com for tracking purposes). For a good explanation of Baidu’s paid advertising, go here.
• In November, critics on Chinese state television blasted Baidu’s business model and accused them of allowing unlicensed medical sites to take up top spots in search results (Baidu has said they will remove these sites) and of blocking sites that chose not to pay for keywords (Baidu denies).
• A group of lawyers has already gained the support of 50 companies for a joint lawsuit against Baidu. The group says they will wait to file the suit until the total reaches 100.
• Baidu’s business model does not provide a fair representation of search results for its users. By mixing paid and organic results they taint the concept of true search. Some may argue that the top organic results on Google are practically paid anyways due to all the cash they’ve dropped into SEO, but there’s still a big difference between fighting your way to the top via building out a big content site and instantly buying your way into the top results with a zero-value sales page. Besides, has Baidu seen how much money Google is making doing it the up-front way?

FT

Tagged as: advertisers, Advertising, baidu, build, Business, china, chinese, Companies, Company, engine, Google, Groups, keywords, lawsuit, Lawsuits, Money, sales, Search, SEO, share, sharing, site, sites, Support, television