Baidu could be the big winner in Google vs. China

Chinese search site could easily pick up Google's 35% market share if it exits country

If Google does exit China, the big winner in its confrontation with the country stands to be a company you probably haven't even heard of.

Baidu Inc., a Chinese search company, has a major presence inside the country but very little recognition outside of its borders. That could all change, though, if Google pulls its business out of China, leaving a big space in the search market for Baidu to move into.

Already, the stock market has taken notice of this. Beijing-based Baidu's U.S. shares jumped 13% today.

"This gives them a strong new opportunity to become a global company, a powerful global company," said Whit Andrews, vice president and distinguished analyst with analysis firm Gartner, Inc.

"This is certainly a significant potential opportunity for Baidu. At this point, they would not need to do much except stand there and continue to be a strong search vender. Google's absence from the market would create a vacuum which would be a powerful factor for Baidu. And it would give the opportunity for other startups to crop up," Andrews said.

Google announced late last night that a major attack launched against its network from within China had forced it to consider pulling its business out of the country.

After the attack, which was aimed at exposing the Google Gmail accounts of Chinese human rights activists, the search vendor said it was in the process of reconsidering earlier agreements with the government to censor search results of users in China.

In China, Baidu, which declined to be interviewed for this story, far exceeds Google's market share numbers.

"Baidu has almost 60% of Chinese search, which makes it the dominant player in the market," said Dan Olds, an analyst with The Gabriel Consulting Group. "Worldwide, it's less of a player, as the vast majority of its volume is confined to China and Chinese speakers."

By last measurment, Google had about 35% of the Chinese search market, "a number which has grown quickly over the last few years." Olds said Baidu would just love to eat up that share.

"Without a doubt, Baidu is the big winner if Google pulls out of China," he said. "The losers would be Chinese people, who are looking for a window on the world that isn't filtered by political dictates from Beijing."

Allegations have surfaced in various publications that Baidu has manipulated search results for government and commercial purposes.

"In Internet circles, Baidu has the reputation of being eager to censor Web content at the behest of the Chinese government," said Olds. "Fair and balanced, they ain't."

Baidu had its own security issues this week. The search site was offline part of the day Monday. Reports have surfaced that attackers changed Baidu's records at Register.com, the search engine's official domain registrar.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, send e-mail to sgaudin@computerworld.com or subscribe to Sharon's RSS feed .

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