Baidu China’s Search Giant to Expand Into Social Media

Baidu Inc, China's top search engine, is now planning to branch out in social media services in China in order to compete with Tencent Holdings - a social media giant in the region.

baidu Baidu Inc, China’s top search engine, is now planning to branch out into social media services in China in order to compete with Tencent Holdings – a social media giant in the region.

Google, the world’s top search engine lost a lot of ground in China during the last year or so as a result of censorship dispute with the Chinese authorities. This Google spat provided Baidu with the opportunity to solidify its lead in Search in the Chinese market. Baidu search market share in China rose to 75.5% during the fourth quarter of 2010, up from 73% during the previous quarter – as compared to Google, who’s share has dropped to 19.6% from 21.6% during the previous quarter. With the search lead secured, Baidu now wants to diversify into social media, another market segment that is now wide open for Chinese players thanks to Facebook being blocked out.

Tencent, a Chinese social media giant, quickly capitalized on Facebook’s absence from China to gain a massive share of the social media market in China. The Chinese and Japanese social media market is not just lucrative because of its size, but is a gold mine when it comes to monetization potential. According to a recent study by in-stats, Asia-Pacific accounted for 70% of the global virtual goods revenues in 2010.

Baidu on its part, does not want to repeat Google’s mistake of neglecting the social space. Robin Li, the CEO of Baidu stated that social products have a “meaningful” commercial value. Li was speaking on a conference call, after the company posted its fourth quarter results. Baidu has reported profits of $176 million for the quarter, up from around $80 million a year earlier.