"The scandal-ridden search engine’s reputation may be in terminal decline "
Three years ago, China’s internet was ruled by its three biggest companies, Baidu, Alibaba, and Tecent, collectively known as BAT. Each was headquartered in a major economic region, and admired by tech graduates all over the nation.
Fast forward to 2019, and Baidu, the search giant that was once leader of the triumvirate, is now trailing on several fronts. In the fourth quarter of 2018, Baidu was valued at 77.9 billion USD compared to Alibaba’s 398.2 billion USD and Tencent’s 425.7 billion USD—a division that had appeared as early as 2017.
Meanwhile, Baidu Wallet, a competitor to Alipay and Tencent’s WeChat Wallet, has barely gotten off the ground. The Beijing-based company has even bowed out of its three-way food delivery race with Meituan Dianping and Ele.me, selling its delivery platform to the latter in 2017.
The company’s image has also been in steady decline. In September 2018, as Alibaba founder Jack Ma was being declared China’s “unofficial ambassador” at the Forum on China-Africa Cooperation, Baidu was embroiled in another scandal after an Anhui couple was swindled out of 15,000 RMB by an unaccredited hospital they found through a paid Baidu search result. The incident recalled the 2016 death of college student Wei Zexi due to treatment recommended at a similarly shady hospital, a scandal commonly believed to have been the turning point in Baidu’s fortunes.
The specter of the Wei scandal rose again on January 17, 2019, when CCTV investigative journalist Wang Zhi’an learned that Baidu had filed a complaint with Tencent about Wang’s WeChat essay on health-supplement pyramid scheme Quanjian, which mentioned the Wei scandal in passing. Wang wrote that he was being threatened with unspecified “penalties” unless he admitted to “infringement of the company’s name.”
Then, on January 22, ex-Southern Weekend journalist Fang Kecheng published an essay, calling Baidu’s role as a useful search engine “dead” because it prioritized results from the company’s own web products—particularly its blogging platform Baijiahao, which has been accused of disseminating “fake news.” As the piece went viral, the company’s share price fell by 6.4 percent the same evening.
After Google’s acrimonious exit in 2010, Baidu went from being China’s leading search engine to having a virtual monopoly on the market; if Google returns to the mainland, as some reports have speculated, it would further add to Baidu’s woes.
Not everyone believes the end is nigh for Baidu. Web consultant Yang Jianyong argues that Baidu only appears to be in decline compared to its BAT cohorts because the company has prioritized AI research over consumer products of late. Should it figure out a good business model for its self-driving cars and other AI consumer technology, the company could rise again. The only thing that may have prevented Yang’s views from getting more credibility was the fact that they were published on Baijiahao.
“Bye Bye, Baidu?” is a story from our issue, “China Chic”. To read the entire issue, become a subscriber and receive the full magazine. Alternatively, you can purchase the digital version from the iTunes Store.