The Chinese search engine that out-Googled Google

By Sumner Lemon

April 30, 2007 12:00 PM ET

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Today, Google lags far behind Baidu in China, in terms of both its popularity with users and revenue derived from search-related advertising. Despite Google's best efforts and the millions of dollars it spent to open an office in China, the company shows no signs of closing the gap with Baidu.

Baidu executives clearly believe that the company's success is secure. "We don't think competition is a major threat at this point," founder Li, who currently serves as the company's chairman and CEO, told investors during a February conference call. (Xu left the company in 2004.)

Like Google, Baidu derives most of its revenue from Internet ads. It earned 829 million renminbi ($106 million U.S.) from online advertising in 2006, a 170% increase over the previous year.

In recent months, Baidu has branched out into new areas, reaching beyond search. The company has added a news service, for which it recently received a license from the Chinese government, and a blogging service, called Baidu Spaces.

Buoyed by its success, the company launched a Japanese-language search engine, Baidu.jp, in March, as part of its plan to spend $15 million this year to build up a Japanese business. It will be interesting to see if Baidu "gets" Japan.

Lemon is an IDG News Service correspondent in Singapore. Contact him at .

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