Baidu: Beating Google at Its Own GameBaidu

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Baidu: Beating Google at Its Own Game
Competitive advantage and sustainability
* 60% market share, double that of Google Inc. in China
* First mover advantage- developed a search engine that provided information in local Chinese languages * Offers searches in Chinese
* Focused solely on Chinese
* Knowledge of Chinese language and culture
* Algorithms are different and better suited
* Direct sales forces of 3,000 people in 7 cities to better serve its customers and assist in the areas of payment and logistic infrastructure * Higher penetration of distributors than Google

* Goal: “to provide the best way for people to find information”- avant-garde technology to the world’s most ancient and complex language * Provides a wide range of products and services
* Consumer-to-consumer
* Mobile search
* 25% of its revenue from partner websites
* “pay-for-placement”- companies bid for search-result placement based on relevant keywords * Google brought 2.6% stake in Baidu for $5 million
* Later sold for $60 million
* Strategic acquisitions of businesses, assets, and technologies *
* Baidu and Google:
* Search, community, other enhancements
* Business model- selling ads tied to user searches
* Revenues derived from online marketing activities, principally auction-based pay-for- performance search advertisements * to serve small to medium-sized enterprises doing business in Japan * Focus product development to meet the demands of Japanese users * Support of Chinese Government- not blocked by the “Great Wall of China”

Industries Involved
Internet information providers
Information technology
Online advertising
Software and computer services in the subset of internet

Major Competitors
* Google Inc.
* Yahoo!
Potential Competitors
* Yandex
* Microsoft
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