Baidu Put in the Spotlight After Chinese TV Report on Fake Websites, Fraud
August 17, 2011 10:42 AM
comment(s) - last by
Baidu shares have slipped by nearly one-tenth in the two days since the report
After Google exited China's search market last year due to censorship and hacking, Chinese search engine
stepped in and claimed the dominant position in the country's successful Internet market. According to Analysys International, a Beijing-based technology firm, Baidu snagged 76 percent of the search market in the second quarter.
Despite Baidu's success, it is developing
a poor reputation
due to fraud. A recent investigative report by China Central Television (CCTV) showed how simple it is to register and promote a fake website on the search engine, which has prompted state media and analysts to push for stricter rules regarding fraud on the company's site.
"As suggested by some experts, if Baidu cannot discipline itself, authorities should consider stepping in," said an article published on the
website. "Just as we do not live for food, Baidu should not just exist for money."
Since the half-hour CCTV investigative report, which ran two days ago and showed an undercover reporter receiving advice from a Baidu employee on how to get around pharmaceutical advertising regulations, shares of Baidu have slipped by nearly one-tenth. This equates to over $5 billion in market value off the company.
Despite this loss, Baidu shares are up almost 50 percent so far this year with a market value of $50 billion. Analysts believe the fall in share price will be "short-term."
"I have not changed my opinion about the company," said Paul Wuh, an analyst at Samsung Securities in Hong Kong. "The company suggested that it has thousands of sales personnel and some bad behavior is not caught all the time."
But CCTV has ran
negative reports on Baidu
before, and hopes to use this information to prompt government investigations. For instance, CCTV ran a story last year that accused Baidu of promoting counterfeit drugs.
"As Baidu becomes an essential part of people's Internet life, we believe the news report could trigger potential government investigations on the paid
model and prospective regulations to protect customer rights," said Wallace Cheung, analyst at Credit Suisse in Hong Kong.
This article is over a month old, voting and posting comments is disabled
Misleading opening paragraph
8/17/2011 11:17:48 AM
The opening paragraph makes it look like Baidu came in from behind to take the lead after Google left. AFAIK Baidu was always the market leader in the Chinese search market. And from what I can remember, Google China is still operating, just from Hong Kong instead.
"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn." -- Seagate CEO Bill Watkins
Baidu: Western Countries Must Follow Chinese Government's Decisions
July 12, 2010, 10:26 AM
Microsoft Calls China Most Important Search Market
December 29, 2009, 10:17 AM
IFPI, Warner, Universal, Sony Attack Baidu, Yahoo, Sohu For Copyright Infringement
February 6, 2008, 6:10 PM
Dropbox Bows to Competitive Pressure, Provides 1TB of Storage for $10/Month
August 27, 2014, 11:17 AM
Amazon Acquires Twitch for $970 Million
August 25, 2014, 4:37 PM
Facebook Adds Satire Tags to Its Auto-Generated "Related News" Posts
August 18, 2014, 10:43 AM
Comcast, TWC Pull Dinner Gift for FCC Commissioner... Sort Of
August 15, 2014, 1:10 PM
Comcast Accused of Wooing FCC Commissioner w/ $110K Dinner
August 13, 2014, 8:20 PM
Quick Note: Nokia’s Lumia 520 Available for $39.99 Off Contract Today Only
August 13, 2014, 10:37 AM
Most Popular Articles
Microsoft's Surface 2 Tablet Family Gets a $100 Price Cut
August 25, 2014, 1:16 AM
Report: Microsoft to Announce Windows 9 on September 30
August 21, 2014, 11:20 AM
From HULC to FORTIS: the Evolution of Lockheed Martin's Incredible Exosuit
August 22, 2014, 12:45 PM
SpaceX Falcon 9-R Rocket Suffers Malfunction, Self-Destructs During Test Flight
August 23, 2014, 9:36 AM
Owner of "Decepticon" Maserati Ordered to Appear in Court This Thursday
August 25, 2014, 7:55 AM
Latest Blog Posts
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information