Chinese Websites Fear Getting on Baidu's (BIDU) Bad Side
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According a publication in China's Economic Observer, Baidu.com
(Nasdaq: BIDU) may be manipulating search results to digitally 'snuff' websites that don't comply with Baidu's rules.
EO said that Baidu might re-direct search results if a site refuses to buy Baidu's keywords or reduces the amount of time devoted to bidding for a Baidu ranking. EO said that Baidu's pure scope allows it to play with search rankings how they see fit.
One major Chinese website potentially in the line of fire is Hudong.com. Hudong is considered the 'Wikipedia' of China, with over five million entries coming from three million writers. The article is not clear why Hudong is being targeted by Baidu specifically, but it does say that Hudong has approached the Chinese government to have Baidu cease abusing its maket position and impose a 790 million yuan fine (about $120 million) fine on the Chinese search giant.
Hudong only receives about 10% of their hits as a result of Baidu, the rest come from Google (Nasdaq: GOOG) searches.
One iResearch report for Q410 has Baidu with an 83.6% share of the Chinese search market. EO's article goes on to say that: "According to article 19 of China's anti-monopoly law, "if an enterprise has control of more than half the market share in any one sector, we can say that this enterprise has a dominant market position."" An antitrust lawyer familiar with the industry commented that, "an industry player that possesses a dominant market position can not abuse its market dominance to eliminate or restrict competition."
The article (originally published February 28th and translated today) comes out mere days as Baidu is seeing heat from U.S. regulators for piracy issues and several Japanese firms also taking action against Baidu piracy.
So, with all the recent allegations, is Baidu shooting itself in the foot? Investors pushing the stock up 1.4% higher today suggests that market share is still dominate and will remain dominate for the time being.
(Nasdaq: BIDU) may be manipulating search results to digitally 'snuff' websites that don't comply with Baidu's rules.
EO said that Baidu might re-direct search results if a site refuses to buy Baidu's keywords or reduces the amount of time devoted to bidding for a Baidu ranking. EO said that Baidu's pure scope allows it to play with search rankings how they see fit.
One major Chinese website potentially in the line of fire is Hudong.com. Hudong is considered the 'Wikipedia' of China, with over five million entries coming from three million writers. The article is not clear why Hudong is being targeted by Baidu specifically, but it does say that Hudong has approached the Chinese government to have Baidu cease abusing its maket position and impose a 790 million yuan fine (about $120 million) fine on the Chinese search giant.
Hudong only receives about 10% of their hits as a result of Baidu, the rest come from Google (Nasdaq: GOOG) searches.
One iResearch report for Q410 has Baidu with an 83.6% share of the Chinese search market. EO's article goes on to say that: "According to article 19 of China's anti-monopoly law, "if an enterprise has control of more than half the market share in any one sector, we can say that this enterprise has a dominant market position."" An antitrust lawyer familiar with the industry commented that, "an industry player that possesses a dominant market position can not abuse its market dominance to eliminate or restrict competition."
The article (originally published February 28th and translated today) comes out mere days as Baidu is seeing heat from U.S. regulators for piracy issues and several Japanese firms also taking action against Baidu piracy.
So, with all the recent allegations, is Baidu shooting itself in the foot? Investors pushing the stock up 1.4% higher today suggests that market share is still dominate and will remain dominate for the time being.
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