Baidu has announced a deal with Microsoft’s Bing to power its English language results within China. Baidu’s Kaiser Kuo explained, “We have an increasing number of people entering English-language queries on Baidu, and that’s never been our strong suit. We’ve been looking for a way to beef up our English search offering and partnering with Bing is by far the most effective way to do it. We already have a partnership with them to provide paid search results for their Chinese language search in China.” The service will launch by the end of 2011.
The paid search results agreement dates back to 2006 so the connection between Microsoft and Baidu has already been established for some time. However, Microsoft will earn nothing from presenting its English results to a Chinese audience, rather it will gain more traction in the global market place which is mostly significant in its global competition with Google.
Chinese searchers who choose to search in English represent a relatively small proportion of the Chinese population — but the volume is growing and the demographic is attractive to advertisers because they are typically urbanised cosmopolitan people and at the higher ends of the income graph.
Whilst Google’s greatest weakness globally has always been that is search results were originally conceived to server English language searches and then have been converted to suit other languages, it is also its greatest competitive opportunity against rival regional search engines. Search engines, such as Yandex in Russia or Baidu in China, have not been able to provide effective English searches which has meant losing users to Google because of its ability to work in multiple languages.
Yandex launched Yandex.com, its own response to the same situation in May of 2010. It chose to launch and control its own version and I asked Baidu why they did not take the same approach? Kaiser Kuo replied, “Producing our own world-class English-language search would be a non-trivial undertaking. At this point, it’s not at all worth the effort when there are other more attractive and sensible options available.” Baidu have said they are working on search in other languages and not producing results in English saves bandwidth in the reported 12 additional languages they are targeting.
The deal is only for English language results in China and only for organic results. Baidu does not sell a lot of keywords for English search terms at present — which is not surprising since they don’t focus on providing English results. Of course, this situation may change as a result of this deal.
A number of points are intriguing analysts. First, China is the largest internet market in the world with currently 470 million users — a number which represents just one third of the population. If China had the same internet penetration as the US, there would be four users online in China for every American online.
Additionally, Baidu dominates the market particularly since Google withdrew to Hong Kong complaining about the censorship regime of the Chinese Government. Baidu receives at least 80% of all search queries in China and that share is heading towards 85%. Microsoft has a very different position towards Government control than Google saying that it always complies with local regulations.
Other reports of the deal:
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