The Onion, which labels itself as “America’s finest news source”, once awarded Kim Jong-un the title of “sexiest man alive”. Not known for its sense of satire, the website of the People’s Daily in China republished the parody as a genuine accolade, complete with a 55-photo slideshow of the North Korean leader.
More recently the Onion reported that the CIA had issued a posthumous apology to Osama bin Laden in light of new evidence that ‘proved’ he was not involved in the September 11 attacks. This time round it was Baidu that was fooled by the spoof news. That was bad enough, but for China’s biggest internet search company, more embarrassing revelations have subsequently followed.
Why Baidu is in the news again?
The press coverage started last month when Fang Kecheng, formerly a journalist at Southern Weekly, was forwarded a report that had picked up the Onion article about the CIA apology to bin Laden’s family. The article was directly translated into Chinese, without mentioning the original source or giving any other context.
Many of Baidu’s Chinese users thought the report was legitimate but as a PhD student at the communications school of University of Pennsylvania, Fang smelled immediately that something was wrong.
Following a few quick searches Fang found that the Chinese version of the article had first appeared on Baijiahao, a media platform owned by Baidu, with the Onion as its original source.
Within a few days the material on Baijiahao had been viewed more than 1.6 million times via WeChat and millions more times elsewhere. Most of the traffic had been directed there through Baidu’s search results which, according to Fang, are heavily skewed towards pointing internet users to Baidu’s own family of sites.
For example, when the PhD student tried to search for “how to write a dissertation”, the top results were dominated by links to pages from Baijiahao, Baidu Knows (the Chinese firm’s equivalent to Quora) and the Wikipedia-like Baidu Baike.
The few results that were unrelated to Baidu were sponsored ads from ghost writers looking for business from people too lazy to write their own dissertations.
The findings prompted the former journalist to write a scathing article titled “Search engine Baidu is already dead”. By mid-January the essay had become one of the most forwarded items across Chinese social media.
“Baidu wasn’t like this a year ago. It was far from this 10 years ago. Though it had various problems back then, it still fulfilled its basic responsibilities as a search engine. It served as people’s entry point to the Chinese internet,” Fang wrote. “But now, it’s more of a site-wide search engine for Baijiahao… It no longer points you to high-quality intellectual content in the Chinese internet but just to the rotten food it has hoarded at home.”
“It’s pathetic that given the size of China’s internet, we’ve fallen into a situation where we don’t even have a search engine,’” he lamented.
Remember the ‘don’t be evil’ mantra?
Baidu isn’t alone in running into criticism about how it derives its search results. Google’s CEO Sundar Pichai slogged through a three-hour long hearing last month with American lawmakers who questioned whether its search engine algorithms were politically biased.
The American firm’s troubles with the European Union are also well-documented. It was fined €2.4 billion ($2.7 billion) in 2017 on antitrust concerns over its price-comparison services and a year later it was given another €4.3 billion fine for bundling software on the Android operating system used by smartphone makers.
Yet were Google to exploit its dominant position in search to direct traffic primarily to its own products, the chances are it would incur a fate far worse than tough questioning on Capitol Hill or fines from European regulators. The company would probably be broken up or blocked from operating.
This partly explains why Fang’s article has resonated with so many internet users in China. The track record of Baidu’s search business doesn’t help either. Its longstanding practice of selling highlighted or higher-ranked ad positions (for its keyword searches) to clients has come in for criticism for lacking social responsibility – for instance, in the way that unregulated medical clinics have bought their way to the top of searches. Things reached a nadir in 2016 when a 21 year-old cancer patient died after receiving dodgy treatment he learned about from just such a Baidu search (see WiC324).
In fact, Fang’s article was the second high-profile attack on the search engine in recent weeks. On January 4, Wang Zhian, another journalist-turned zimeiti (a Chinese term for a paid blogger; see WiC413 our backgrounder on this new media sector), penned an article looking at several deaths linked to misleading medical ads on Chinese search engines. Wang reckoned that the firms in this field should be held responsible for the wild growth of spurious healthcare groups such as Tianjin Quanjian (now under investigation for fraud, see WiC436).
“Quanjian should be condemned to death, but it is not the only one,” he thundered, referring to other large healthcare firms that often rely on pyramid schemes to propel sales.
However, his statement was also interpreted as a not-so-subtle jab at internet firms, which have also profited by promoting these dubious entities online and lending them credibility.
How has Baidu reacted?
Wang’s article only mentioned Baidu twice but it was enough for a threat of legal action from the search giant, which sent complaints to Wang and WeChat (where Wang publishes his zimeiti articles) citing the material as malicious slander.
Baidu’s response to the earlier accusations by Fang of dumbed-down content within its ecosystem was less furious, mind you. On January 23 it published a statement admitting that its search results have a weighting towards material on Baijiahao but said that the links there account for “less than 10%” of all results.
It also said that it was using third-party feedback and artificial intelligence to remove poorer-quality information, and that the Baijiahao’s platform included various kinds of media outlets and writers.
“There are currently 1.9 million bloggers on Baijiahao, covering all [of China’s] authoritative media firms and information providers,” Baidu insisted. “And there are a great amount of high-quality zimeiti which have been providing in-depth, authoritative content endlessly.”
However, onlookers were quick to rebuff some of that explanation, arguing that most internet users only read the first few pages of search results – which tends to be the 10% portion stuffed with Baijiahao content.
“The percentage of Baijiahao links in total search results is a meaningless number,” Fang critiqued in a follow-up post on WeChat, adding that the only meaningful figure is the number of links to Baijiahao on the first page of suggested reading.
“All of them!” one of Fang’s WeChat followers replied.
“Besides a couple of sponsored ads,” another added.
Baidu’s other tormentor Wang has also refused to back down, despite the potential lawsuit. He posted screenshots of Baidu’s complaint on his WeChat account and insisted that his original claims were accurate. He also went a step further in posting a summary of the medical scandals alleged to be related to misleading information found via Baidu searches.
Will competitors benefit from Baidu’s problems?
In their comments on Baidu’s rejection of Fang’s criticism, some internet users called for a boycott of the Beijing-based company’s search engine.
But Baidu still has a 70% share in its home market, partly because of a lack of serious competition. Google once accounted for nearly 30% of China’s search business before its retreat in 2010 over censorship concerns. The American giant is said to be plotting a return with a censored version of its search engine but the plan has met with stiff resistance from staff, plus protests from US politicians.
When news started to rumble about Google’s possible return last August, Baidu CEO Robin Li published a note warning the Californian firm to prepare for stiff competition if it came back.
But tellingly Baidu shareholders weren’t so belligerent, with the stock falling 8% on the day that Google’s ambitions were reported.
In the meantime Microsoft’s Bing is the leading foreign challenger to Baidu – although it only had about 2% market share last year, according to StatCounter (that was actually a little below searches conducted on Google by Chinese users with VPNs).
Unlike its US peers, Microsoft has bowed to Chinese government demands to censor its search results. Yet despite its compliance, even Bing was blocked last week. The disruption only lasted a couple of days but it soon stirred speculation on what was happening. Because service was interrupted during a period in which internet regulators have been blitzing “offensive” sites and apps, some foreign media assumed that Bing was being targeted by a government diktat. (The authorities deleted about 6 million online posts and 26,000 “illegal websites” in 2018, Xinhua reported last month.)
There were also murmurs that Bing was being bashed as an early warning of the kind of collateral damage that could be expected if the trade and tech conflict with Washington worsens – although that argument is harder to pin down in respect to why the search engine failed last Thursday and Friday specifically.
Media platforms back in China thought the shutdown was more likely to be technical than political, however. And one of the main theories was that the negative coverage of Baidu’s search service might have been factor in the outage at Bing. Simply put, a flood of internet users that turned against Baidu, prompted an unexpected surge of new arrivals at Bing’s site.
So is Baidu okay after all?
Baidu’s market leading position was built in the personal computer era. More recently it has been struggling to stay competitive as more online activity migrates from desktop computers to smartphones.
Take Shenma Search, developed by Alibaba and UC Browser. It controls about 15% of the overall internet search market (just behind Baidu) but its share is more than double that in the mobile browser category, according to StatCounter.
Shenma gets the lion’s share of its traffic from Alibaba consumers looking for goods or services onpopular e-commerce platforms including Taobao.
Tencent, the other key player in the BAT trio (the acronym for Baidu, Alibaba and Tencent), and Jinri Toutiao, a unit of Bytedance and one of the three up-and-coming TMD triumvirate (Toutiao, Meituan-Dianping and Didi Chuxing), have also launched search services.
This has some investors concerned that Baidu’s position in web searches could slip, and that the company could soon be overtaken by Bytedance in particular. Reuters’ Breakingviews, for one, noted last December that unlisted Bytedance is already (privately) valued at $75 billion while Baidu’s market capitalisation is significantly lower ($57 billion as of this week).
Other analysts think that talk of Baidu’s demise is premature. In fact, the company kicked off 2019 by announcing that its revenues topped Rmb100 billion for the first time last year (albeit three years after Tencent and Alibaba reached the same milestone).
The Economic Observer reckons that Bytedance’s 2018 sales came in around the Rmb50 billion mark.
Baidu also claims a lead in deploying Big Data in the search engine sphere, compared to its newer rivals. But as the Chinese internet balkanises into discrete ecosystems – primarily driven by Alibaba and Tencent, which capture vast amounts of user time and data respectively through e-commerce and social media – the one certainty is that the online landscape will continue to change relatively rapidly.
Baidu also knows that there is a risk that these rival ecosystems will flourish beyond its reach, closing off its ability to search them effectively. So perhaps there is some logic to the strategy that Fang’s essay attacked. Baidu boss Robin Li is gambling that one of his remaining advantages in commercial terms – 70% of China’s public internet searches – can be deployed to prioritise content within Baidu’s own ecosystem. In that regard, at least he is defending his home ground and capturing more ‘value’ from user searches.
But that also requires that the hundreds of millions of people who currently default to Baidu’s search engine continue to use the service, even if it means being spoon-fed more stuff from the tech giant’s ecosystem.
WiC’s prediction? Savvier Chinese will search the same keywords with Bing (now active again), Tencent-backed Sogou as well as Baidu. They’ll still use Li’s service – but depend on its results far less.
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