Last week CCTV reported that Baidu had accepted money from fraudulent medical companies to include their websites in Baidu’s top search positions. Baidu issued a public apology for the misdeed, saying it would launch an investigation into the situation, but denies CCTV’s further claim that it excluded some more credible websites that did not buy keywords.
In light of this, Baidu’s new service will include a keyword-suggestion option that would expand the choice of listings to clients. It will continue allowing companies to buy keywords to appear on the top of results pages, unlike other internet companies such as Google and Yahoo.
The announcement came two months after Baidu was heavily scrutinised when reports surfaced that it accepted money from dairy company Sanlu to block listings of negative news regarding melamine at the height of the Chinese milk scandal. According to the American Food and Drug Association, the incident resulted in more than 53,000 infants becoming sick after consuming infant formula containing melamine and at least four dead.
While Baidu has seen unprecedented strength as a search engine in China, claiming 64 per cent market share in search, it is not immune to these recent blows to its reputation.
According to Lonnie Hodge, CEO of Culturefish Media, Baidu has “just been hit by the biggest PR steamroller on the planet”, adding that the incident opens up the door to rivals such as Google to leverage its brand reputation and draw market share.
“I think this makes Google look like a bunch of boy scouts. Google can easily start embracing initiatives and look like Mr. Clean, which will raise its capital from the large enterprises that Baidu has worked very hard for,” Hodge said. “But, Baidu still has its search-engine power and that’s a monster component to advertisers. I don’t think people will be jumping ship just yet but I do think Baidu will need to fix this and should have done this a lot earlier.”
Dave Carini, director of Maverick China Research, adds that similar issues have not stopped netizens and advertisers from turning to Baidu in the past, and it would take a more drastic change for a competitor to begin chipping away at Baidu’s market share.
“I think its credibility has taken a hit but I don’t think its credibility was very high in China to begin with,” he said. “People in the industry already had a fairly low opinion of it, at least in comparison to Google. This is nothing new for Baidu.”
