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China Turns Against Baidu, Ulterior Motives Hide in Plain Sight

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DailyFeed


It was just last year that Baidu founder Robin Li said, "The Chinese government still would like to see U.S. internet companies explore the Chinese market, providing they are willing to abide by Chinese law."

The restrictions have been a problem at best and a dealbreaker at worst for everyone from Yahoo to Microsoft to, most famously, Google. And now it looks like Baidu forgot to drop off someone's monthly envelope at Communist Party HQ, because China seems to be laying the groundwork to "disappear" the company.

According to Asia Briefing's 2point6billion.com, China's state broadcaster CCTV aired a program Wednesday night "blasting" Baidu for the way it ranks search results.

“Baidu’s Phoenix system is the same as a regular price ranking system. The only difference it made is that it’s hidden deeper, harder to figure out, plus it’s more expensive,” said the CCTV reporter, before showing viewers a series of fraud cases involving companies that appeared in Baidu's search results.

This comes shortly after Communist Party organ, the People's Daily, ran an article that said, “As suggested by some experts, if Baidu cannot discipline itself, authorities should consider stepping in. Just as we do not live for food, Baidu should not just exist for money."

Why now? Asia Briefing says, "behind CCTV’s criticism of Baidu lies the possibility that CCTV is attempting to take a piece of China’s booming online sector, which is now dominated by private enterprises."

The possibility is certainly within, well, the realm of possibility. From 2point6billion.com:

Interestingly enough, netizens tended to question CCTV’s motive every time it made similar reports on Baidu. Some speculate that CCTV, as a state-owned broadcaster, always makes a fortune with its advertising business. Now Baidu has replaced CCTV with the rapid rise of internet media and, as a result, CCTV is facing the loss of its “Media King” status as well as some of its advertisers. Moreover, a month before CCTV launched its own search engine in January 2010, it made another report, blaming search engines including Baidu for providing pornographic web site links.

Moreover, a month before CCTV launched its own search engine in January 2010, it made another report, blaming search engines including Baidu for providing pornographic web site links.

Competition in the search business is tough. Competition in the search business when the company gunning for you is the Chinese government is...tougher.
POSITION:  No positions in stocks mentioned.

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