Baidu can expand search share in China, CEO says

Baidu.com can grow its share of China’s highly competitive Internet search market during the coming year, the company’s chief executive officer said Wednesday.

“Our strategy has proven to be a winning strategy,” said Robin Li, Baidu’s chairman and CEO, speaking Wednesday at the Piper Jaffray China Internet & Technology Conference in Beijing. “We will be able to maintain and expand our position.”

Internet search is one of the fastest growing areas in China’s Internet industry. Baidu is generally seen to be the leader in the market, with 51.5 percent of Chinese Internet users using its search engine, according to figures released by the China Internet Network Information Center (CNNIC) in August.

Google was in second place with 32.9 percent of the market, according to CNNIC. Sohu.com’s Sogou search engine was third with 4.6 percent, it said.

Li said his company’s edge over Google stems from its familiarity with the Chinese market and needs of local Internet users, saying a better understanding of the market equals more relevant search results. He dismissed third-party research that indicates Chinese users find Google’s search results to be more relevant than those returned by Baidu, saying relevancy is a subjective measure.

“I don’t think any third party could be a good judge for any relevancy test,” he said.

Nevertheless, research has shown that Google could be well positioned to take market share from its competitors in China. In January, Keynote Systems released the results of a survey of China’s Internet search industry that found Google rated highest among local users in 11 of 13 categories, including general search quality.

While third-place Sogou trails its competitors by a large margin, Sohu isn’t giving up. The company is betting that the popularity of its main portal Web site, and the high volume of traffic it receives, will help give Sogou an edge over its rivals, especially Google.

“Local entrepreneurs in China always have the edge over multinationals,” said Charles Zhang, chairman and CEO of Sohu, noting that traffic to Sogou has increased at a rapid pace. Traffic to Sogou has been growing by 50 percent on a quarterly basis, and Zhang expects that trend to continue through 2006.

“I think we will surpass Google pretty soon,” Zhang said, adding that he couldn’t say how soon that might happen.