...Strategy 1. [pic] INTRODUCTION The name “Baidu”, was inspired by a poem written more than 800 years ago during Song Dynasty whose literal meaning is “hundreds of times”, signifies a persistent search for the ideal[i]. In January 2000, Baidu was founded by Chinese entrepreneur Robin Li (Li) and Eric Xu (Xu) where it conducts its operations in China providing a Chinese Internet search platform through Baidu Online and Baidu Netcom. These companies hold the required licensing and approvals to operate the Company’s websites and advertising services.[ii] Within a few years, Baidu expanded its operations and established three PRC subsidiaries and two other PRC consolidated entities. By January 2008, Baidu launched a Japanese search service with three subsidiaries. To date, Baidu has been the most popular search engine in China and has succeeded in areas where Microsoft and Yahoo have failed: Beating Google at its own game by dominating the search engine market in 2007 with 60.4% market share.[iii] The paper aims to (1) perform an internal analysis on Baidu, to identify the competencies of Baidu; (2) perform an external analysis of Baidu to identify opportunities and threats; and (3) identify business strategies by Baidu and (4) recommend strategic actions to Baidu to compete better in future. INTERNAL BUSINESS FUNDAMENTAL ANALYSIS Organisation Structure and Human Resource Management. Baidu organisation structure works on a functional departmentalisation where...
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...CASE: A-197 DATE: 02/05/09 BAIDU.COM, INC.: VALUATION AT IPO Since its official launch in January 2000, Baidu.com, Inc. (Baidu) quickly grew to become the leading Internet search engine in China. After three rounds of private funding, Baidu registered to go public on the NASDAQ Stock Market (Ticker Symbol: BIDU) on August 5, 2005. (See Exhibits 1 and 2 for a listing of Baidu’s private funding sources and pre-IPO share allocations.) The initial public offering (IPO) turned out to be one of the highest-profile debuts since the Internet bubble burst in 2000. The stock price jumped 354 percent on the first day of trading and closed at $122.54, valuing the company at about $3.96 billion based on 32.3 million shares outstanding. While the market showed strong enthusiasm for the stock, Baidu’s public offering nevertheless generated much debate in the investment community about the underlying value of the firm. Furthermore, concerns were raised about whether or not Baidu was able to sustain its growth rate and exceed investor expectations after the IPO. Factors leading to this uncertainty included: the state of the Internet-paid search market in China, the expected growth in the marketplace, the competitive landscape, and the strength of Baidu’s business model and strategic position. BACKGROUND ON CHINA’S ADVERTISING AND ONLINE ADVERTISING MARKETS Advertising Market From 1995 to 2005 China’s advertising market grew at a compounded annual growth rate (CAGR) of 17 percent, which was...
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...chairman of Baidu, Inc., the most famous Chinese Internet search engine company, has succeeded at changing the Internet core search engine technology in China over the past twelve years. Robin, which is the English name of Yanhong Li, graduated from Beijing University with a degree in Information Management in 1991. Then he received a master’s degree of Computer Science at the State University of New York in Buffalo. In 1999, Robin foresaw the great potential development of the Chinese search engine services and Internet development in China when he was working at Silicon Valley in California. In 2000, after Robin quit his high-paying job, he moved back to China and established Baidu, Inc. with his friend, Eric Xu. Their goal was to show that science changes peoples’ lives. Before founding Baidu, Robin had received the American patent of “hyperlink analysis” technology, which he used later for the Baidu search engine. After several years effort, Baidu has become the most frequently used website in China. Approximately 81.2% of Chinese netizens use Baidu to locate the information that they need every day. Baidu offers many different search services, such as Baidu MP3, Baidu Knows, Baidu Encyclopedia and so on. I knew about Baidu when I was in high school, and I am used to searching information through the Internet by using Baidu. It makes my daily life much easier and more convenient. For instance, I can find millions of images from the Internet on Baidu Image, I can...
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...Baidu-an excellent company Hello everyone, it is my great honor to stand here and introduce a great company for you. Before I start, I would like to conduct a small survey. I want to know how many people here have ever head of Baidu or ever used it. Please show your hands, let me know. Thanks, we have ten people here include me, and 80% have ever used Baidu, right? What’s more, we can see 100% Chinese have used Baidu, and 100% people outside China never heard of Baidu. So the results can really tell us some successful parts of this company, and some parts of it still need to improve. OK, let’s go back to the beginning, the following eight minutes I will introduce an excellent company Baidu for you. I’ve divided my presentation into three main parts. The first one is the introduction of Baidu, the second part is analyzing why the company is so successful, and the third part is the future of Baidu. I’m sure if you listen to me carefully you will find something interesting. NAME Baidu is the largest Chinese language search engine. The name of Baidu was inspired by a poem, written more than 800 years ago during an old Dynasty. The poem compares the search for a beauty with the search for one's dream while confronted by life's many obstacles. The poem is …hundreds and thousands of times, for her I searched in chaos, suddenly, I turned by chance, to where the lights were waning, and there she stood." Baidu, whose literal meaning is “hundreds of times”, represents a persistent...
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...engine market in China, Google’s share in Chinese market, Government rules and regulations related to the internet search. The main issues discussed in this case study are: • Google’s launch in the China and how it made its presence felt over there as well as the key issues faced by the Google such as gaining the market share, although Google did a fair amount of research before entering China but still wasn’t able to beat the local competitor Baidu which is the biggest in terms of search engine in China and accounts for nearly 60% of the market share.(Appendix 4) • Chinese Government rules and regulations related to the censorship in China which was against the Google’s Mission of providing the information. • Cyber attack on Google China which mainly target the gmail accounts of the users who were Human Right activists which forced Google on considering its exit from China. • A brief analysis of the internet search market in China by discussing the market share of various players such as Google, Baidu, Microsoft, Yahoo and other local Players. • Possible strategy which Google could use in order to grow and sustain its market share(Ivey Case B) Introduction: Google started its operations in China in 2005 earlier to that it provided search engine to Chinese...
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...5Some of Google¶s success in China will be determined by the actions and strategies of itsmain competitor Baidu. Up until now, Baidu has exploited its knowledge of Chinesecustoms and outmaneuvered Google in the search engine market. Recently however,Baidu has made several missteps that could cost it market share and investors haveresponded. Over the past year, Baidu¶s stock has been down over 33 percent versusGoogle¶s 18 percent. Search Accuracy The single greatest source of controversy surrounding Baidu has been its practice of giving preference to paid advertisements over organic search result. This practice came tohaunt Baidu when China¶s state run CCTV network reported in November that some patients sought care from unlicensed pharmaceutical companies because they appearedhigher on Baidu¶s search results. Baidu¶s stock took a 25 percent hit in one day xiv and thecompany cut its fourth quarter revenue forecast by 15 percent. Baidu quickly removed theunlicensed companies from its results and on March 29 th , 2009, it announced it woulddrop paid search rankings completely xv .Baidu¶s search problems do not stop there. Some former Baidu clients claim the searchengine dropped their web sites after they stopped buying search ads from Baidu xvi . Baiduhas denied these accusations, but a group of more than 50 companies are planning tolaunch a lawsuit against Baidu for anti-trust, fraud, and infringement violations xvii . Baiduis also allegedly complicit in another Chinese...
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...CASE: A-197 DATE: 02/05/09 BAIDU.COM, INC.: VALUATION AT IPO Since its official launch in January 2000, Baidu.com, Inc. (Baidu) quickly grew to become the leading Internet search engine in China. After three rounds of private funding, Baidu registered to go public on the NASDAQ Stock Market (Ticker Symbol: BIDU) on August 5, 2005. (See Exhibits 1 and 2 for a listing of Baidu’s private funding sources and pre-IPO share allocations.) The initial public offering (IPO) turned out to be one of the highest-profile debuts since the Internet bubble burst in 2000. The stock price jumped 354 percent on the first day of trading and closed at $122.54, valuing the company at about $3.96 billion based on 32.3 million shares outstanding. While the market showed strong enthusiasm for the stock, Baidu’s public offering nevertheless generated much debate in the investment community about the underlying value of the firm. Furthermore, concerns were raised about whether or not Baidu was able to sustain its growth rate and exceed investor expectations after the IPO. Factors leading to this uncertainty included: the state of the Internet-paid search market in China, the expected growth in the marketplace, the competitive landscape, and the strength of Baidu’s business model and strategic position. BACKGROUND ON CHINA’S ADVERTISING AND ONLINE ADVERTISING MARKETS Advertising Market From 1995 to 2005 China’s advertising market grew at a compounded annual growth rate (CAGR) of 17...
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...2010 International Conference on E-Business and E-Government A Comparative Study for Search Engines’ Business Model --Base on the case of Baidu and Google Hou Hanpo School of Business Beijing Technology and Business University Beijing, China Li Haibo School of Business Beijing Technology and Business University Beijing, China Wen Jing School of Business Beijing Technology and Business University Beijing, China Abstract—Due to the advantages of the search engine’s business value, search engine has been rapidly developed in the network economy era. With the market competition become white-hot, search engine enterprises are facing the problem how to choose an effective business model. A search engine’s business model was designed in this paper. Based on the six dimensions in business model, a comparative study about the representative search engine enterprises in China and the USA was conducted. It was found that Baidu and Google have a unique competitive advantage in market and products respectively. But to win the future market, Baidu and other Chinese search engine enterprises should pay more attention to product design, market segmentation, as well as understanding of the Internet culture, and to provide users with differentiated products and unique user experience as a competitive strategy. Keywords- Search Engine, Business Model, User Experience, Product Design, Market Segmentation the business actors involved, and the sources of revenue. Afuah and Tucci...
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...tweak the layout and results Yahoo: Launched in 1994 Global leader in daily habits Selling of placement advising links Baidu: Introduced in 2000 Adapted to the research of Chinese words English site for developers Recently introduced in Brazil Bing: Launched in 2009 Microsoft/Yahoo alliance Microsoft’s attempt to challenge Google All in one Ask: California 1996 Question and answer format The About.com group Poor quality results 2. A number of scholars and IT professionals have regarded this as an era of technology advancement throughout the world. Within the next five years, there are expected to be many more search engines besides Google and Yahoo. There will be interactive search engines, where users will be speaking instead of typing. This will make search process a lot easier. For example, a user will just have to speak few keywords and search engine will automatically search the relevant information. The search engines will work around the trend history and will display a column with search results on a side from last few hours, days or weeks. Further, it is expected that search engine home page will be customized based upon the result of most frequent search keywords. There would be enhanced and strict rules and laws in regards to search performed on search engines. Also, there would be restricted and monitored search in certain nations. 3. Baidu founded in the year 2000, it is the leader in the search engine market in China, whereas Google lead in USA. Baidu’s...
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...China has shown that Google did not stand behind their mantra. I am a bit torn in regards to the second question regarding whether or not it is better to engage in self-censorship than have the government censor things. I think that self-censorship can lead to problems in that it may emphasize certain bias and may share information that should not really be shared; however, I think that censoring done by the government is also problematic because they can withhold information that we all deserve to know. 3. If all foreign search engine companies declined to invest directly in China due to concerns over censorship, what do you think the results would be? Who would benefit most from this action? Who would lose the most? I think that Baidu, China’s homegrown company, would most definitely benefit if all foreign search engine companies declined to invest directly in China due to concerns over censorship. Those who would lose the most from an...
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...sophisticated web search and information retrieval services. Yandex provides localized services for its users, as well as enables them to search for websites in other languages. In addition to web search the company offers dozens of free online services, granting access to extensive local, national and international information. The services include maps; traffic jams information; photo hosting; news service; blog search; spam-free email and many others. Yandex is the second after Google technology debut, whose stock has risen as much as 68 per cent since it was listed on Nasdaq in 2011. According to financial times, Yandex has earnings multiple of about 85 times net income, higher than Google`s, at 19 times earnings, and almost matching that of Baidu, China’s top search site, at 87 times earnings. According to Nasdaq, Yandex generated 64 per cent of Russian national search traffic. Before we look at more recent developments, we need to recap why Yandex made its way to the top in Russia in the first place. One of the main reasons is Yandex’s focus on the Russian language. Western search engines and algorithms are generally built from English language structures which are then adapted....
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...Dominant Brand -Google in China By Qu Chen 0544631 RELS 2250 Business Ethics November 4thc, 2014 Introduction As we all know, Google is the world’s most demanding search engine, which is one of the largest information technology companies that based their production and processes through the use of internet. Now, Google is not just a search engine anymore, it also offers online productivity software including Gmail, a cloud storage service, such as Google Drive, an Google Docs and a social networking service Google+. Desktop products include applications for web browsing, organizing and editing photos, and instant messaging. However, some of the popular products of Google are the Google web search engine, Goggle product search, Google Map, GMail, Google Video, and more. In fact, The Company started as a research project by two PhD Larry Page and Sergey Brin students in Stanford University of California in 1996. (Google Campany) Google Inc. has many company locations but their main office is located in Mountain View, California. The main office of Google is more popularly known as Googolplex. (Google Campany) Development of Google According to the webpage of Google, there mission is to make a system that will ease everybody when they want to search for something. Google wants to systematize every information in the world as well make it universally assessable and user friendly to everyone. The vision of Google is to make the company known as the “The perfect...
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...Inside the Google and China Negotiations MGMT583N-Negotiation Research Paper Cathy Zhang Google have experienced two series of negotiations with the Chinese Government from 2006 to 2010. The first round negotiation settled successfully when Google first entered China in 2006. Google established a local domain (google.cn) to better serve the mainland China Internet users when it failed to acquire a stake in the Chinese top search engine company Baidu. However, in January 2010, David Drummond, Google’s Senior Vice President posted “A new approach to China” on their official blog, threating to pull out of China due to a series of cyber-attacks and excessive censorship on search results.This negotiation concluded in July 2010 when Google had redirected google.cn queries to Google.com.hk, where uncensored search delivered via servers in Hong Kong. This research paper is aimed at discussing the two rounds of negotiations from both Google’s and Chinese Government’s perspectives. Google’s Perspective From a Silicon Valley start-up to one of the world’s Internet titans, Google would never be satisfied limiting its business in the U.S. market. In 2006, China has 111 million Internet users, the second highest Internet population right after the United States. At this point, Google’s strategy to enter China must be profit-driven. From the second quarter of 2006 to the fourth quarter of 2009, Google’s market share in China has increased from 16 percent to 36 percent. Although...
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...Chapter 2 Closing Case: Google’s Mission, Ethical Principels, and Involvement in China Google, the fast growing Internet search engine company, was established with a clear mission in mind: to organize the world’s information and make it universally acceptable and useful. This mission has driven Google to create a search engine that on the basis of key words entered by the user will scan the web for text, images, videos, news articles, books, and academic journals, among other things. Google has built a highly profitable advertising business on the back of its search engine, which is by far the most widely used in the world. Under the pay-per-click business model, advertisers pay Google every time a user of its search engine clicks on one of the paid links typically listed on the right hand side of Google’s results page. Google has long operated with the mantra “don’t be evil”! When this phrase was originally formulated, the central message was that Google should never compromise the integrity of its search results. For example, Google decided not to let commercial considerations bias its ranking. This is why paid links are not included in its main search results, but listed on the right hand side of the results page. The mantra “don’t be evil”, however, has become more than that at Google; it has become a central organizing principle of the company and an ethical touchstone by which managers judge all of its strategic decisions. Google’s mission and mantra raised...
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...What dose Baidu do? Baidu is a search engine tool, using its powerful Chinese information repository for retrieving the user to provide information services, commodity information resources to obtain address and services help Baidu users to find the information resources of the Internet to meet the needs of the information. In recent years, Baidu's main profit model is becoming clearer, and the services they provide and the content was changing trends. Baidu as a business, you need to face two very important customers: one is ordinary users of Baidu, Baidu general Internet users of information retrieval; another commercial customers direct economic transactions with Baidu. For the former, Baidu to provide information retrieval services, not money earned income, but the network CTR. For the latter, Baidu to provide technical or advertising, and have achieved substantial economic income Baidu sustained expansion operating funding sources. The retrieved users and commercial customers and now the driving force is Baidu. Both are indispensable. Baidu, uses its search technology and information repository to attract a wide range of network users, forming a stable mass base the brand belongs Baidu effects, including stable Baidu search usage, the relatively high rate of retrieval match search results CTR. Publicity opportunities behind this effect is tapped, so with the keyword advertising market development. So far, Baidu has developed an efficient profit model. What’s so great about...
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