Are Legal Battles at Baidu (BIDU) on the Horizon? -FT

December 1, 2008 8:45 AM EST

According to a report from the Financial Times, Baidu.com (Nasdaq: BIDU), commonly referred to as "China's Google" (Nasdaq: GOOG), may be forced to face a wave of legal battles as more and more groups are coming out saying the search-giant's business practices are not abiding by China's new anti-monopoly law.

One of the first groups to complain about Baidu's business model says that it now has over 50 other companies that would be willing to sue Baidu, and that it will file a mass complaint once this number has reached 100. So far, the alleged claims have ranged from "brand infringement" to "fraud", but the majority of the claims stem from a report last month that the search-giant has previously favored websites that use Baidu's keyword auction system.

The FT article points out that Baidu currently holds about 70% of China's internet search market, which compares to Google's measly 26% market share. Concerns with Baidu's revenue model and business practices, something the FT article calls a "crisis of confidence", seem to now be threatening this dominant position, however.

Shares of Baidu are currently down more than 6% to $127.00 in pre-market trading. The weakness could either be attributed to the negative FT article, or just from a downside move in the broader markets -- Dow futures are currently down nearly 200 points, while the S&P and Nasdaq are down 23 and 24 points, respectively.

Baidu.com, Inc., through its subsidiaries, provides Chinese language Internet search services primarily in the People's Republic of China.

Related Categories

Corporate News
Insiders' Blog

Stocks Mentioned

Related Entities

• Standard & Poor's

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?