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
8/17/2011 2:35:19 PM
You know that's a good point. By pretending to police themselves they give themselves an excuse to close sights that could be promoting democracy and speaking out. But than again, China's government exists to protect its people from the unfiltered horrors of America like porn, reality TV, and Family Guy. I know way-to-go Captain Obvious(It's morning give me a break).
You know I wonder if we'll ever see China in a different light other than the corrupted business giant of today. Like a humanitarian country or something. lol. sorry made myself laugh.
"Folks that want porn can buy an Android phone." -- Steve Jobs
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
AT&T Defeats Purpose of New Apple SIM, Locks iPad Air 2 SIMs to Its Network
October 24, 2014, 2:17 PM
Microsoft to Discontinue Free, Ad-supported Xbox Music Service on December 1
October 23, 2014, 10:03 AM
Christian Bale Confirmed to Play Steve Jobs in Upcoming Film
October 23, 2014, 8:43 AM
Monica Lewinsky Speaks Out, Calls Herself "Patient-Zero" for Internet Cyberbullying
October 21, 2014, 2:25 PM
Google Fiber Finally Heading to Austin, Texas in December
October 16, 2014, 11:48 AM
Dropbox Flexes Security Muscle, Appears to Have Squashed Password Breach
October 15, 2014, 12:12 PM
Most Popular Articles
Chinese Government Declares Digital War Against America's Top Tech Firms
October 20, 2014, 12:07 PM
Samsung Announces Galaxy S5 Plus with Snapdragon 805 Processor, LTE-A
October 22, 2014, 3:40 PM
Windows 8.1 + Android "Sell Mini PC" w/ Bay Trail Creates New PC Form Factor
October 20, 2014, 5:07 PM
Apple's iPad Air 2 Features Triple-core A8X Processor, 2GB of RAM
October 21, 2014, 8:32 PM
Apple Releases iOS 8.1; Adds Apple Pay Support, SMS Relay, Instant Hotspot
October 20, 2014, 1:00 PM
Latest Blog Posts
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
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
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information