Antivirus products and services have been a renewed battleground in China in the past couple of years, enveloping several of the country’s top web businesses. According to rumors in the industry heard by TechinAsia, that battle is now taking the form of these companies vying to acquire NetQin (NYSE:NQ), a China-based expert in mobile antivirus apps. Both Baidu (NASDAQ:BIDU) and Tencent (HKG:0700) are thought to be in the running, but the market value of NetQin is proving to be a bone of contention.

NetQin executives even addressed the rumors late last week in the earnings call after revealing their Q1 2013 financials. Directly alluding to the suitors, NetQin co-CEO Omar Sharif Khan said during the call:

Over the past several months, NetQin has been approached by both strategic and financial investors for potential investment opportunities with us, while we appreciate this interest. We remain focused on delivering shareholder value to successful execution of our strategic planning initiatives. We will not fail on delivering shareholder value.

A few minutes before saying that, Khan lamented “a significant gap that exists between the market valuation and our business results”, which could well be the sticking point in negotiations with potential major investors or acquirers. NetQin is currently at $8.25 per share with a market cap of $363 million. Khan elaborated on this pricing:

We’ve also always believed that if we continue to deliver stellar results and growth, the market valuation of the company would appropriately reflect the fundamentals of the company. As both the shareholders and executive management of NetQin, we are not at all satisfied with a significant gap that exists between the market valuation and our business results. Frankly, it’s unacceptable. I want to be crystal clear, we are absolutely committed to creating shareholder value and we will put in a relentless effort to closing the before mentioned gap.

Asked by Oppenheimer analyst Andy Yeung about a 100 percent acquisition, Khan declined to reveal more except for saying that “multiple parties” had shown interest in both financial and strategic investments.

We’ve reached out to Baidu and Tencent about these rumors.

Tencent began pushing strongly into the antivirus market in China in 2010, setting themselves up on a collision course with well-known software maker Qihoo (NYSE:QIHU). After Qihoo launched a search engine last summer, Baidu has retaliated in recent months with antivirus products for Windows PCs aimed at both Chinese and overseas consumers.

Acquiring NetQin would propel Baidu into mobile antivirus products on the Android and iOS platform (where it currently has nothing), and would boost what Tencent already has in terms of mobile antivirus offerings.

NetQin shares fell 14 percent from Wall Street seeing its Q1 financials on Wednesday night to close of trading on Friday. That’s despite revenues rising to $33.2 million in Q1, with operating income up to $2.3 million.

That would certainly seem to be a denial. But interestingly, reporters got a somewhat vaguer text from Sogou CEO Wang Xiaochuan, who told them simply that nothing had yet been finalized. On his microblog account, Wang has denied rumors that he’s slated to join Alibaba. And Sohu CEO Zhang Chaoyang stressed earlier this week that the company has enough cash in the bank that it doesn’t need to put Sogou up for sale.

None of these statements have done much to quash the rumors, however, because it seems no one is willing to come out and directly say: “We’re not selling (or buying) Sogou, period.” Whether or not a deal is ever finalized, the lack of absolute language in all three statements suggests that there is, at the very least, some consideration of an acquisition deal going on behind the scenes. And with Qihoo hoping to pose a more serious threat to Baidu, and Baidu wanting to prevent that, it certainly makes sense that both companies would be looking at Sogou and other minor search players as potential acquisitions to bolster their search offerings.

For now, though, we’ll just have to wait and see. Perhaps someone will outright deny the rumors, or perhaps in a few weeks or months we’ll find out that there was some truth to them when Sogou announces a new investment or merger.

(Tencent Tech via TechWeb)

Sina’s report cites a “knowledgable” source in “investment circles” as saying that Sogou is looking for a buyout, and the three aforementioned internet giants have jumped at the chance. According to the source, Qihoo has offered a $140 million deal that includes cash and stock options, Baidu is offering more in cash (he doesn’t cite a specific sum), and Tencent is mostly in the mix because it wants to be sure Sogou doesn’t go to Qihoo.

Furthermore, the report suggests a difference of opinion high in Sogou’s ranks, with CEO Wang Xiaochuan wanting to take the Qihoo 360 deal while board chair Zhang Chaoyang would prefer to sell to Baidu. But as Zhang has reportedly been taking more personal time of late, Wang has been taking the front seat in the proceedings, and Sina’s source says, “it’s a bit more likely that [Qihoo] 360 will win.”

Of course, this is still just a rumor, even if these kinds of rumors do seem to be coming true a bit lately. We’ve contacted Baidu, Qihoo 360, and Tencent for comment, and will update this story if we hear back, but we don’t expect much as most companies have a general policy of not commenting on rumors. All three of them declined to comment for the Sina Tech story (although apparently none of them denied it outright, which is interesting). Sogou CEO Wang Xiaoquan has called the rumor “unreliable” on his Weibo account.

By some counts, Sogou has the third-largest market share in Chinese search, so acquiring it would be a big boost for Qihoo, which has been struggling to close in on Baidu after its initial grab of more than 10% of the market shortly following its launch. But Sogou’s real value may lie in its widely-used Chinese input method software. The company has already begun to integrate search into its input method in a way that I think is potentially very significant. New applications of that concept could be a nice — and very valuable — bonus that comes along with the boost in market share of buying Sogou.

(via Sina Tech, image deleted)

It’s worth noting that compared with Q4 2011, Alibaba also has had the strongest growth both in revenue and profits.

If these numbers are any indication, Alibaba is likely to hold that top spot on the profit charts for some time to come. But of course, all of these companies are making gobs of money, so I don’t imagine any of them are going to be all that upset about who places where on this ladder.

It’s also worth noting that Tencent’s fall in profits could be due to increased investment in WeChat, which is fighting similar apps like Line and KakaoTalk for international users, and which hasn’t been fully monetized yet. Baidu is also moving internationally – we just spotted the company making inroads into Indonesia — and splashed some cash on a big local acquisition, too. And of course, Alibaba is clearly not going to be content to rest on its laurels, as it just invested a boatload in Sina Weibo and rumors are swirling about a number of other acquisitions and a possible IPO on the horizon.

(via Sina Tech)

While we were doing our usual browsing of the web we stumbled on something very interesting: a new site by China’s Baidu (NASDAQ:BIDU) that’s an Indonesian version of its web links portal Hao123. Just like Baidu’s other Hao123 sites outside of China, the new portal for Indonesia uses Google’s search engine rather than Baidu’s. Baidu declined to comment about this stealthy launch.

Baidu also runs its Hao123 portal – which is a sort of web directory like AOL or Excite – in other Asian and Mid-East countries in their local languages, like Vietnamese, Japanese, Thai, and Arabic. Plus it operates in Portuguese for Brazilian netizens.

Like all such web directory sites, Baidu’s Hao123 monetizes from advertising and paid links. The Indonesian site has links to local web favorites such as Kaskus and Tokobagus, plus lots of other local and global media and social sites. It’s not clear if those are all paid link. Of the five search options on the Baidu Hao123 site, three lead to Google searches, while ‘video’ leads to Youtube, and ‘music’ goes to the notorious piracy site 4Shared.

Earlier this year, another Chinese company made a move into Indonesia when Tencent president Martin Lau was cautious in saying that it’s in talks with local company MNC Media about the possibility of launching a search engine in the country.

While it’s not guaranteed that Indonesia will see the launch of Baidu’s search engine any time soon, Baidu is doing research into Southeast Asian languages at its new Singapore R&D lab, so it’s core search engine could finally expand to somewhere other than China and Japan.

Baidu, which is China’s top search engine, has been looking overseas a lot more in the past year; aside from that lab, it has launched antivirus products for Southeast Asian markets, and zoned in on north Africa and the Mid-East with its mobile browser app.

Well, the rumors are true. Chinese search company Baidu (NASDAQ:BIDU) announced today that it has acquired PPS.tv’s streaming video service for $370 million. The acquisition bolsters Baidu’s video offerings (it already owns iQiyi) and puts it in a position to challenge market leader Youku-Tudou (NYSE:YOKU) for a bigger share of China’s web video marketplace. By some user counts, this acquisition makes Baidu the proud new owner of China’s biggest video platform. (UPDATE: Unsurprisingly, representatives from Youku-Tudou dispute the claim that Baidu is now China’s largest video platform. Baidu’s official press release states that the acquisition “create[s] China’s largest online video platform” but does not cite specific numbers; however, Tech in Asia believes this claim to be based on data collected by a domestic market research firm.)

PPS.tv will continue to operate as a sub-brand of iQiyi, according to the release, but current iQiyi CEO Gong Yu will also be CEO of the new PPS sub-brand. Current PPS president Xu Weifeng and CEO Zhang Hongyu will remain onboard as co-presidents.

In a TechWeb poll from before the news became official, respondents were split on whether Baidu’s newest acquisition could help it win the video market, but the massive move to mobile is complicating the question further. Chinese net users watch billions of hours of video each month, but increasingly they’re doing it from mobile devices, and on that front Baidu’s iQiyi is already closing in on Youku-Tudou. (iQiyi claims 200 million monthly mobile users to Youku-Tudou’s 150 million daily users).

Even so, Youku-Tudou president Dele Liu says he welcomes the competition. Responding to rumors of the merger two weeks ago, Liu told reporters:

After the success and synergy created by the Youku-Tudou merger, increasing consolidation was inevitable throughout the video industry. We are happy to see this purchase go forward; we expect this acquisition will further rationalize the industry and help reduce piracy in the sector.

Nevertheless, the news poses serious questions for Youku-Tudou, and puts Baidu in a better position than ever to challenge for dominance of the streaming video market, especially on mobile devices.

UPDATE: Updated 11:38 to add “monthly” and “daily” to better clarify the Youku and iQiyi mobile numbers.

We know that Chinese netizens watch billions of hours worth of online videos each month, but how many of them are doing so from a mobile device? Now we have the answer. China’s top two mobile sites (in terms of time spent viewing) have recently revealed their mobile user-base. The leading company, Youku Tudou (NYSE:YOKU) says it has 150 million million daily mobile users, while Baidu’s (NASDAQ:BIDU) iQiyi has 200 million monthly mobile viewers.

Youku Tudou, whose data covers both of its standalone sites after the corporate merger last year, says it sees 50 percent quarter-to-quarter growth in mobile users. iQiyi, meanwhile, explains that mobile traffic now accounts for 37 percent of its total.

With such fast-growing mobile engagement, both companies are rushing to implement mobile-based ads so as to monetize all those views. To that end, iQiyi has a new cross-platform ad service that was launched last week, covering its website and apps for Windows, iOS, and Android. Youku Tudou is also offering mobile ads starting from this month.

Though the figures don’t give a perfectly analogous picture – daily views vs monthly, etc. – it stresses that these companies need to translate their desktop advertising prowess to smaller screens without ruining the viewing experience – especially for the big draw, which is their licensed (but mostly free) TV series and movies.

Baidu is rumored to be acquiring another video site, PPS, for a substantial sum so as to bolster its Hulu-like iQiyi site even further.

IDC says that smartphones represent 73.2 percent of all mobiles sold in China right now, but feature phones are still more numerous in the country as a whole. So mobile viewership of video-streaming sites has a lot more growth to come.

(Source: Technode (1) and (2))

It’s worth pointing out that for some reason TechWeb didn’t offer a straight-up “no” option, but even so, it seems pretty clear readers are split on this. Frankly, I agree with them — it’s very hard to say. On the one hand, Youku-Tudou has been holding the number one spot for a while and even with PPS’s market share in hand, Baidu’s services wouldn’t surpass it. On the other hand, though, Baidu has a lot more money, and a much more diverse platform it can use to integrate video in a number of ways that might tempt viewers away from Youku-Tudou, assuming that it can match that site for quality of content.

This is one where I think we’re all just going to have to wait and see.

(via TechWeb)

Chinese web company Qihoo has lost its second lawsuit and legal tussle this week. This time, Qihoo (NYSE:QIHU) was up against search engine rival Baidu (NASDAQ:BIDU) in the Beijing High People’s Court, where a judge ruled in favor of Baidu’s unfair competition suit and ordered Qihoo to pay a fine and publish an apology.

Just two days earlier, another court ruled that Qihoo should pay damages to Tencent in a separate case – and say it’s very sorry.

The Baidu lawsuit against Qihoo dates back to the events of last fall, shortly after Qihoo – initially a web portal and software maker – launched its own search engine. While the Beijing court only imposed a fine of RMB 450,000 (US$72,000), smaller than the damages that must be paid to Tencent, Baidu’s legal claims were quite significant, accusing Qihoo of things like violating industry practices by circumventing Baidu’s block on Qihoo indexing Baidu’s content on sites such as Baike, which is a sort of Wikipedia clone. The court ruling today also accused Qihoo of utilizing Baidu’s search results in its own new search engine.

The leading search engine had earlier accused the newcomer of illegal seizure of Baidu’s intellectual property, and was seeking RMB 100 million ($15 million) in damages. Clearly the judges had a different idea of the value of that content.

Qihoo’s apology to Baidu must be displayed for 15 days [1] – coincidentally the same period of time as its apology to Tencent. But, as noted by Rihanna, I’m guessing that the perpetrator is not very sorry.

(Source: NBD – article in Chinese)

(Source: NBD – article in Chinese)

China’s top search engine, Baidu (NASDAQ:BIDU), posted its Q1 2013 earnings after the close of Thursday’s trading in the US. A major milestone was reached as daily mobile search users hit 100 million in number for the first time ever. That’s in addition to over 80 million collective users of its mobile apps, such as the Google Maps-beating Baidu Maps app.

Q1 2013 financials

• Quarterly revenues of US$961 million (up 40 percent from the same period in 2012)
• Operating profits of $355.9 million (up 5.7 percent from Q1 2012)
• Net income rose to $328.9 million

Following a good day for Baidu in Thursday’s trading, rising nearly five percent to $92.34 per share, after-hours trading took on a darker mood after seeing the latest earnings report. It’s currently down eight percent to $84.83 in after-hours trading.

Why is it down? According to Investors.com, markets are being spooked by two main factors. Firstly, Baidu saw rising expenditure this quarter in the form of greater traffic acquisition, bandwidth, and content costs. Indeed, content costs more than doubled in the past year to reach $15.4 million, representing 1.6 percent of total revenues. That was attributed in Baidu’s report to “the full quarter impact of iQiyi’s consolidation” – a reference to Baidu pumping money into its Hulu-like video streaming site.

Speaking of iQiyi, there are rumors circulating that Baidu will acquire rival video site PPS in order to bolster iQiyi further, but Baidu hasn’t commented on those reports.

Secondly, after-hours trading was also hit by Baidu’s earnings and sales missing Wall Street forecasts. Plus there’s the recurring concern over new search engine rival Qihoo, which entered the sector last summer and quickly rose to 10 percent market share.

See the full Baidu Q1 2013 results here.

China’s leading search engine, Baidu (NASDAQ:BIDU), is said to have acquired a rival social video site for $300 million to $400 million. This rumored acquisition of PPS.tv would bolster Baidu’s own Hulu-esque video-streaming site iQiyi.

The buy-out will reportedly merge PPS into Baidu’s iQiyi. PPS is an old favorite with Chinese netizens from when it used to be packed with pirated TV shows and movies – that’s before PPS cleaned up with licensed content in the past couple of years.

We reached out to Baidu this afternoon, but a Baidu spokesperson declined to comment.

The Baidu-PPS rumors have actually rumbled on for about a month, but today’s reports suggest that it’s a done deal that will be announced soon.

Interestingly – and somewhat bizarrely – the company behind China’s top social video site, Youku Tudou (NYSE:YOKU), issued a statement about the Baidu-PPS rumors. Youku president Dele Liu says:

After the success and synergy created by the Youku Tudou merger, increasing consolidation was inevitable throughout the video industry. We are happy to see this purchase go forward, we expect this acquisition will further rationalize the industry and help reduce piracy in the sector.

But Dele Liu was just responding to the rumors, not insinuating that the news is true.

However, it is true that consolidation is inevitable in this pricey and heated sector where it costs millions of dollars to secure the exclusive rights to Chinese, Korean, or western TV dramas and movies. China’s biggest web company Tencent (HKG:0700) has also been bolstering its video site in the past year.

According to ComScore, China’s netizens watch upwards of four billion hours of web videos each month, making social video portals and licensed content an increasingly important part of the Chinese web scene.

(Source: Techweb – article in Chinese)

(Photo: Associated Press)

Shortly after this weekend’s earthquake near the Chinese city of Ya’an in Sichuan province, which has so far claimed nearly 200 lives with many more still missing, a number of leading web companies rushed to help with the disaster response by setting up online ‘people finder’ message boards.

Here are the five main online resources:

Google’s Person Finder

This is a well-known site in such an emergency, with buttons for “I’m looking for someone” and “I have information about someone”. Google’s dedicated Sichuan quake boards currently have 1,100 records, though it’s not clear how many of those are made up of people looking for missing folks, or actual bits of information about a lost/found individual. The Google site is also nice enough to link to several resources from other web companies, such as the ones listed here.

Baidu Zhidao for Ya’an

Baidu’s Wikipedia-esque Zhidao site now has a dedicated messaging board for the quake-hit area. In contrast to Google’s more closed-off (privacy-oriented?) Person Finder, the Baidu boards are open to anyone to read through.

360 Search for Ya’an

Qihoo’s board emphasizes the names of missing folks in very large type, making it easy to browse through.

Sohu Public Service for Ya’an

Major web portal Sohu has a Google Person Finder-like site (pictured above) split into “want to find” and “want to help” buttons. It also features an open board with Pinterest-style notes for each person being sought. So far, over 7,600 ‘missing’ posts have been made, but many could be duplicate names.

Panguso Post-Quake People Finder

State-run search engine Panguso has had the sense to make this site mobile-friendly, as many people will be turning to their smartphones or feature phones and using 2G or 3G in an area where many buildings and internet lines have been destroyed, or where electricity has not yet been restored.

Earlier today we saw smartphone rivals Apple and Samsung both make sizable donations to post-quake relief efforts. Social sites like Sina Weibo and the messaging app WeChat (known as Weixin in China) are also playing a part as people in the affected area use lots of web and mobile resources to communicate or find information.

Follow the updates on the China Daily live blog.

The very minimal UI of the new Baidu Antivirus app for PC users in China.

After months of testing it in on users in Southeast Asia and then around the world, Chinese search engine Baidu (NASDAQ:BIDU) has now launched its antivirus PC software in China.

It’s a major challenge to arch-rival Qihoo (NYSE:QIHU), which muscled into China’s search engine market last summer but is perhaps best known for its antivirus software.

The Baidu Antivirus app is co-produced with security experts Kapersky. It’s not clear if it’s essentially the same as the earlier Windows app that was marketed overseas as “Baidu PC Faster”. But Baidu’s newest product for its home audience is labeled v1.0 beta 1, and is currently only taking on a limited number of beta testers. Currently, it can’t be downloaded from the new Baidu Antivirus Chinese homepage until it opens up to a new batch of early adopters.

Qihoo’s security credentials have been in the spotlight a lot this year, with numerous allegations of improper data collection and exploitation of users of its PC apps, like its antivirus offerings and its popular 360 Browser for Windows. Not only has a respected Chinese newspaper blasted Qihoo as a “cancer” of the internet, but Apple has banned all of Qihoo’s iOS apps with no explanation. Baidu might be privately seeing this as a good opportunity to win over users to its new app.

To fully challenge Qihoo, Baidu will surely need to create antivirus apps for Android as well.

(Sources: ZOL and Marbridge Daily)

Chinese search engine Baidu (NASDAQ:BIDU) invested $306 million in Qunar back in the summer of 2011 to take a majority stake in the travel e-commerce site. Today Qunar is reported to have secured a new funding round worth $57 million with backing from Baidu, Hillhouse Capital, and GGV Capital.

TechCrunch notes (via First Financial Daily) that the newest $57 million investment was finalized last month but has not yet been confirmed by Baidu. Today’s round effectively values Qunar at about $483 million.

Qunar is one of a number of high-profile Chinese web companies thought to be building towards a US IPO sometime this year having previously vowed to go public as soon as “the market stabilizes.”

Baidu’s Kai Yu at the new Institute of Deep Learning in Silicon Valley. (Images: Wired)

Wired has dropped in on a brand-new facility opened by Chinese search engine Baidu (NASDAQ:BIDU) in the heart of Silicon Valley. Dubbed Baidu’s Institute of Deep Learning (IDL), it has just hired its first researcher in Cupertino, California (yes, so now Baidu is neighbors with Apple), and plans to grow the team this year.

The Baidu IDL will research the relatively new field of ‘deep learning’ – mimicking the brain with a mix of hardware and software – and might yield some clever new products in future, such as something like Apple’s Siri or Google Now for voice-activated searches on mobile ¹, or perhaps something related to wearable computing like Google Glass. Well, we know Baidu is working on glasses-based tech already.

Baidu’s head of its speech- and image-recognition search team, Kai Yu (pictured), made the trip from Beijing to Cupertino to hire the lab’s first researcher. He explained the plan so far:

We have a really big dream of using deep learning to simulate the functionality, the power, the intelligence of the human brain. We are making progress day by day.

He added that Baidu needed to make the trans-Pacific leap to get “access to a huge talent pool of really, really top engineers and scientists” so as to compete with Google in these fledgling fields.

While Kai Yu says that they are working on Baidu Eye at the new lab, he stresses that the emphasis is on deep learning algorithms that can keep the search engine – which has 70 percent market share in China – ahead of its rivals.

This isn’t Baidu’s first overseas lab. There’s the Baidu-l2R Research Center in Singapore, which focuses on natural language processing technology for Southeast Asian languages – specifically Vietnamese and Thai. While that other facility might indicate that Baidu is keen to launch its search engine in nations like Vietnam and Thailand in the near future, the Cupertino facility is quite different, and seems motivated by a need to get closer to the best neuroscience talent emerging out of universities there.

Another motivating factor might be the growing competition in this sector after Google recently hired Geoffrey Hinton, who’s considered to be the godfather of deep learning and neural network research.

(Source: Wired)

The answer, it turns out, isn’t all that clear. As you can see in the graph from CNZZ below (we’ve translated it), Qihoo has gained a little bit of ground since last October. CNZZ has Qihoo with 14.87 percent of the search market, which certainly isn’t bad.

Of course, not everyone agrees with those numbers. Hitwise’s latest data (which comes from March) has Qihoo’s market share at only 11.97 percent, and while that still represents growth, Baidu’s market share is also up and at 78.55 percent according to Hitwise. And Guosen researcher Qiu Lin told Sina Tech that their data shows Qihoo having started with around a 10 percent share, then dropping to 8 percent before slowly climbing to its present position at around 12 percent of the market. No matter whose data you’re looking at, though, the message seems pretty clear. Qihoo is growing slowly, but Baidu may be too, and either way Baidu continues to serve the vast majority of China’s search traffic.

Interestingly though, the proportion of Baidu users to 360 Search users can vary a bit depending on what sort of thing users are searching for. Baidu users are always a strong majority of course, but even so, check out the variation in this CNZZ chart of what search engine incoming users used to access some of China’s most popular websites:

Qihoo’s stated goal for its search engine is to reach 40 percent of the market share in 2015, which seems perhaps overly optimistic given the slow growth it has seen over the past six months. Even so, 12 to 15 percent of such a huge market is nothing to sneeze at, and JG Capital reportedly estimates that search could bring in as much as $95 million for the company by the end of this year. And Qiu Lin says his most optimistic estimate for the company’s yearly search revenue for this year is more like $300 million.

Thankfully, since Qihoo is a publicly-traded company (NYSE:QIHU), at some point next year we’ll get to see the real, official numbers instead of just speculation. But there’s likely to be an awful lot of war to be waged between Baidu and Qihoo between now and then, and of course that’s not even mentioning the question of mobile search, which is a much more open market given that many of Chinese mobile users aren’t on smartphones yet and thus haven’t formed their mobile search habits.

(via Sina Tech)

Yesterday, we wrote about the rumors spreading in the Chinese tech media that Baidu was working on a Google Glass-like augmented reality headset called “Baidu Eye.” Today, a Baidu representative confirmed to Tech in Asia that Baidu is indeed working on augmented reality glasses, internally codenamed ‘Baidu Eye’, though he stressed that the project is experimental and may not be released as a commercial product. And although the project may appear similar to Google Glass, our source at Baidu sounded unusually confident that Baidu Eye has some features that will stand out as original and innovative.

The Baidu rep also confirmed that “most” of the details reported about ‘Baidu Eye’ are accurate. Yesterday, we reported that the Baidu Eye is worn like glasses, features an LCD display, can recognize images, and is controlled by voice. Of course, since the project is purely experimental at this point, there’s no guarantee that any commercial product Baidu might release in the future would necessarily have those features. But from what we’ve heard, it sounds like the Baidu Eye might have more up its sleeve than anyone is yet aware of. (We asked for specifics, but Baidu is keeping its lips tightly sealed for now).

It’s hard not to speculate about the Baidu Eye, especially given the wealth of information Baidu has at its disposal across its various services. Unfortunately, it sounds like we may still have a while to wait before we learn if the Baidu Eye is ever going to be a commercial product, and if so, what its unique features will be. However, this is obvious a topic we are extremely interested in, so we’re going to keep a close eye on it (and harass our sources at Baidu about it until we can pry out some more details).

(I do hope that the company considers changing the name if it ever launches the project as a commercial product, though. When I hear “Baidu Eye” the first thing that comes to mind is this).

(UPDATED on April 3rd: A Baidu representative confirms to us that this is a genuine – though early – prototype that does indeed have the internal name “Baidu Eye”).

Where Google goes, so too goes Baidu? It certainly seems the company may have been inspired by Google Glass if Sina Tech’s report that the company is working on a new wearable tech product called Baidu Eye (pictured) is correct.

Baidu representatives were “not available” for comment, according to the China Daily. Tech in Asia has also contacted Baidu for comment, and will update this story if we hear back.

Sina’s report cites knowledgeable-but-anonymous sources as saying that the Baidu Eye is worn like glasses, features an LCD display, can recognize images, and is controlled by voice. These features are reportedly already operating properly, but the style and build of the device is apparently still very much in testing (which is good to hear considering the ugly, bulky look being sported in the image above). The company is also still reportedly working with Qualcomm on getting the battery life to 12 hours or above.

Perhaps unsurprisingly, the Baidu Eye will also be an application platform that third-party developers will be able to develop apps for. More broadly, Baidu apparently is aiming to create a wearable tech platform that companies could take advantage of to release all sorts of wearable technology products.

Sina Tech’s report speculates that if the device’s image recognition (which includes face recognition) works well enough, it could be used to catch wanted criminals simply by walking around. However, my own immediate reaction is that the device, if it ever became widely used, could create huge problems for China’s censorship apparatus (assuming that like Google Glass, it allows users to record and upload images and videos virtually instantaneously).

Still, wide adoption is still a long way away for the device, which hasn’t even been officially announced yet. My guess is that a commercially-available Baidu Eye is still a year or two away — if it’s ever released at all — but I could certainly be wrong. We’ll be following this closely and pestering our friends at Baidu for more info, so stay tuned!

(via Sina Tech)

Microsoft’s Bing search engine has never been a major player in China. The company itself conceded that last fall when it all but abandoned Chinese language search, opting instead to focus on what it then said was the 5 percent of searches in China that use English rather than Chinese. But six months later, it appears Bing’s strategy hasn’t worked. In an interview with Sina Tech, Microsoft VP Shen Xiangyang said that the company’s shrinking China market share — now barely above half of one percent, according to research firm CNZZ — put it in a seriously tough spot:

If you can’t see users’ search questions and choices, if you don’t have enough data to work with, then there is no way to make improvements [to the search engine].

And in this market, a search engine that isn’t improving is going to get left behind. Bing already appears to be most of the way there, but the further behind it falls, the less data it has to work with, making a comeback increasingly less likely.

Even so, Shen suggests the company will continue with its focus on English-language search:

Differentiating yourself in web search is extremely difficult. Today, if Chinese users want to search in English, Baidu doesn’t work, and a certain overseas company’s search [Google] doesn’t necessarily work well either. If we can get half of the China market for English search, Bing will have three percent of the overall China search market.

Another possible approach to the market might be pushing Bing to Chinese users through a browser — especially since many Chinese users still surf with Microsoft’s Internet Explorer. But Shen doesn’t seem particularly optimistic about that happening anytime soon:

If Bing could use a browser the way Qihoo 360 or Sogou do, our market share would definitely go up. But Microsoft makes changes very cautiously, and it needs to further understand users’ usage habits [before making any changes to Internet Explorer].

Does Bing really have any chance in China? It hasn’t yet managed to capture even the tiny English-language search market, and more and more Chinese users are moving away from Internet Explorer and onto domestically-designed browsers, so any browser advantage Microsoft hoped to capitalize on would need to be exploited fast. Personally, I don’t see it happening. But China’s search market is pretty crazy. You never know what could happen.

(via Sina Tech)

TechWeb yesterday reported quite an interesting rumor: Baidu is interested in buying the commerce search and group buy company Aibang. Aibang representatives declined to give TechWeb a comment on the matter, and Baidu representatives declined to comment as well when approached by Tech in Asia, so nothing has been confirmed, but on the other hand, nothing has been denied, either. Hmm.

The rumor began when DXY CTO Feng Dahui mentioned on his WeChat account that he had heard through the grapevine that Baidu was interested in buying Aibang. TechWeb’s sources have apparently suggested that the tech giant is mostly interested in Aibang’s mobile app, and that Aibang could be worth as much as $100 million.

There are admittedly a lot of questions worth raising about this deal, the biggest of which being whether or not it’s actually happening at all. But Baidu being interested in Aibang would certainly make sense as the company’s commerce-and-service-focused search features would be a great complement to Baidu’s own web search service, and acquiring and perhaps integrating its mobile app would give Baidu a stronger foothold in the mobile realm, which is increasingly becoming an important battleground for search companies. It would seem to be a bit similar to Baidu’s $306 million investment in Qunar, the travel search and services company.

Then again, though, Baidu could be looking to spend its money outside the country, as it has $1.5 billion set aside for overseas acquisitions and has some choice targets to choose from.

(via TechWeb)

To try it yourself, just head to Baidu.com and search for π and watch the numbers chew up your browser.

Surprisingly, rival search engine giant Google doesn’t have a pi doodle up on its homepage.

(Hat-tip to Baidu international communications director Kaiser Kuo who pointed this out on Facebook)

Perhaps not entirely coincidentally, market leader Baidu (NASDAQ:BIDU) dropped by nearly the same amount in that period of time. Elsewhere in the new traffic pageviews numbers from CNZZ, Google continues its slide down while most of the other rivals are fairly stagnant.

To get a sense of the big impact of Qihoo’s search engine since it launched last August, let’s compare the new February numbers with ones from October last year:

Over that whole time, Baidu has gone down by almost the same as Qihoo has gone up. And don’t forgot that a chunk of Qihoo’s initial share upon arrival on the scene also came from Baidu.

Though Qihoo is currently facing serious charges over abuses of user privacy on its software apps – including the web browser that feeds so much traffic to its fledgling search service – the company posted a strong Q4 financial report earlier this week that caused its share price to hit an all-time high.

(Source: CNZZ data, via Marbridge Daily)

Typing on the keyboard is probably the most fundamental way we interact with any computer, or for that matter almost any digital device. Voice recognition and dictation software might replace it someday, but as any Siri user knows, we’re definitely not there yet. And for Chinese users, input method software is simply a part of the typing process. Because Chinese is written in characters but keyboards tend to use the Latin alphabet, to type anything in Chinese you need software that interprets the phonetic sounds the user types (for example: baidu) into Chinese characters. But of course, many phoentic sounds have multiple possible interpretations, which means that input method software needs to include a graphical user interface (GUI) so that users can choose which baidu they meant (For example, 百度, 拜读, 摆渡, 白都, 败毒 and more would all be typed as baidu).

What that means is that Chinese users are used to clicking things from a GUI as they type. These days, many input methods have incredible predictive text algorithms that make it possible to type long sentences and have the correct characters filled in automatically, but no algorithm is perfect (or knows every proper noun) so some user intervention is always necessary. This is just a part of everyday computing for Chinese users on a more fundamental level than even, say, using a web browser.

How Sogou’s search input method works

So why is Sogou’s implantation of search results into its input method system so significant?

It moves the search war closer to users. Until now, Baidu, Qihoo, and Sogou have been battling for search supremacy mostly within the confines of the web browser. Now, Sogou has brought the war to users’ desktops, their word processors, and even competitors’ websites. If you allow it to, Sogou’s input method search will display the search results you’re looking for even when you’re typing in Baidu.com’s search bar. And since users are already in the habit of interacting with and clicking things in the input method software’s GUI, getting them to click on relevant search results isn’t that much of a stretch. If Sogou’s input method search catches on, Baidu and Qihoo may be forced to produce similar offerings. But neither company has nearly as strong a user base for their input method software as Sogou (in fact, Qihoo doesn’t have any input method product at all). By redefining the battlefield, Sogou has put itself in a strong position — at least, if it gets its users to adopt the new “smart” version of its software.

It feels like a natural extension of language input. When I read about this new feature, I’ll be honest — I was expecting it to be awful. The prospect of having search results pop up as I typed just seemed intrusive and annoying, and if it wasn’t my job, I probably wouldn’t even have bothered to download the software and try it out. But when I did try it, I was very pleasantly surprised. Because it gives you a great deal of leeway in defining where and how the search results pop up, it is simultaneously unobtrusive and convenient, and I could easily see it becoming a regular part of users’ computing experience. After all, why bother booting up a browser when you can just type the search term and see the results you want immediately, no matter what program you’re using?

Search is just the beginning. Sogou’s current implementation of input method search is limited to specific kinds of searches, but it doesn’t have to stay that way. In fact, it doesn’t have to stay search-oriented at all. Imagine simply typing the name of a brand’s product and then purchase that product directly from the desktop in the input method GUI. Or typing the name of a friend from inside any program to bring up a video chat with them, or even share your screen with them. The possibilites are virtually endless, and in moving into input method search, Sogou may have taken us one step closer to a world where users interact much more quickly with the web by not using a browser at all.

Of course, Sogou’s new search input method could just as easily lead to nothing at all. As it’s not a mandatory update to Sogou’s input method software — at least, not yet — many of Sogou’s users may not even know about it, and plenty who do know about it may choose not to download it because it sounds intrusive and pointless. And to be clear, while this product is cool, it isn’t going to change the world by itself. But is it the first step down a new path towards a new way of interacting with the internet? Call me a dreamer, but I think it could be.

Oftentimes, people like to compare Vietnam with China. In some ways, the similarities are pretty obvious. The Chinese dynasties ruled Vietnam for one thousand years. Vietnamese people celebrate Lunar New Year, and our names have Chinese roots. But online and in the tech industry, things look really different.

In Asia, there are four communist countries: China, Vietnam, Laos, and North Korea. Laos and North Korea are so small they’re not really on the tech map (even if North Korea is finally using mobile internet). That leaves China and Vietnam. In China, Baidu, Tencent, and Sina Weibo are the search and social media giants. In Vietnam, Google and Facebook are tops and Twitter isn’t blocked. What happened?

Search

China began interfering with Google’s search service in 2010, and it frequently fails to load but is not fully blocked. It’s due to China’s effort to manage the content that the majority of its population has access to; it’s also, some have argued, a big part of the protectionist success of Baidu and Sina Weibo who fill the shoes of Google and Facebook/Twitter. Today, Baidu gets an average of five billion search queries per day, and Google gets over 100 billion searches per month. But with Google partially locked out of China (it’s still the fifth most used search engine there), Baidu basically has near-exclusive access to the biggest market in the world.

In Vietnam, Google.com.vn is the number one search site and Google.com is number three. Vietnam has some new locally-made players like Wada.vn and CocCoc, but they’ll have a hard time up against Google’s dominance. In the mid 2000’s, Google was already slowly creeping into Vietnam. Youtube was and still is one of the most used and viewed websites in Vietnam and so Google was allowed to slowly creep in.

The interesting thing about Vietnam is that Google never officially opened up an office here. It still hasn’t. Google slowly entered, its value was assessed by users, and then it slowly rose to dominance. Now, if Google were blocked in Vietnam, it would leave a huge black hole in the Vietnamese cyberspace.

This is the trend in Vietnam. Let them in, assess how politically harmful they could be, and then realize it’s too late to cut them. For social media, it’s a little more complex. But the same principles apply.

from Doubleaf via Flickr

Social Media

China began blocking Facebook in 2008 and Twitter in 2009. In China, the Great Firewall has been very hard to get through, so China’s users have flocked to local social services like Sina Weibo ¹. Although many would argue that Chinese sites would still have more users even if others were not blocked. I don’t buy it. If Facebook wasn’t blocked in China, Zuckerberg would open up an office there and/or be collecting the same wealth of data that Weibo now collects on its users. Today, Sina Weibo supposedly has 500 million users. That’s more than Twitter’s 200 million and less than Facebook’s billion.

Vietnam started blocking Facebook in 2009. But the block was relatively casual. Most users still get on via DNS tweaks or using HotSpotShield with no problems. This is exactly why we’ve seen such explosive growth in Vietnam – doubling its numbers in a year. It’s currently the fastest growing Facebook country in the world, and Facebook has surpassed Zing as the nation’s top social destination.

Vietnam let Facebook in and let it grow until it was too late. Recently, I learned from an undisclosed source that Facebook supposedly has 15 to 20 million users in Vietnam already, so if authorities pull the plug it would be disastrous for users in the country. Hundreds and thousands of businesses have set up shop in Vietnam with Facebook Pages and advertisements.

And although the block has strengthened along with the political tides, that has more served to educate the population to self-censor more than deterred use of Facebook. Today, the block is as light as ever. And because of this, Vietnam has effectively avoided the need to build its own Weibo.

Oh, and as far as Twitter is concerned, in Vietnam, microblogging still hasn’t caught on. That’s probably why it’s not blocked.

from Vietnamese comic artist Thanh Phong

What this all means

Although Vietnam and China are neighboring socialist republics and Communist comrades, they’ve taken very different political stances towards the internet. China sees the internet variously as a battle field, a business goldmine, and a threat to social stability. China’s allegory is one of a large empire controlling the biggest population in the world and eventually leading the world. Information is essential to that and it must be tightly controlled and it must be Chinese. That was underlined this week by China’s tech ministry taking a dim view of Android.

Vietnam, with about 92 million people, is smaller in population than China’s most populous province, Guangdong, with its 104 million. The allegory in Vietnam is catch up and adapt. There isn’t a global agenda. That has allowed Vietnamese users to reap the rewards of the two tech giants – both Silicon Valley and China’s web companies – but that’s at the cost of not building giants of its own. Vietnamese social media and search startups struggle to compete with Facebook and Google with no government protection, financing, or encouragement.

There are two sides to this coin. In China, the result is a lot of space for startups and mega-tech companies like Baidu to build for the local population. But they sacrifice a connection to the world. In Vietnam, startups have to compete with outsiders while also getting a little more globally connected – although many would argue people here are still very isolated. The end result may be that some Chinese tech successes are inflated because they have no “real” competitors beyond their borders; and Vietnamese startups are stunted because they can’t out-execute the big guys or regional startups who expand into the country.

But the truth is, it’s a very hard comparison. Although they’re run under relatively similar governments, the scale alone puts everything out of proportion. Chinese companies immediately have access to a huge population while also competing with a host of other fellow Chinese companies. How they triumph over these odds is what really fascinates me.

I’d love to hear your thoughts on this, comment below at your leisure.

China’s Sogou has been a player in the search market here since the early days. At present, it commands around 8 percent of the search market share, which makes it one of China’s top three search engines but still puts it way, way behind the dominant Baidu (which has more than 70 percent of the market). But Sogou does dominate the Chinese input method market, with reportedly more than 100 million users across its mobile and PC input methods.

Yesterday, Sogou announced an update to the “smart” version of its PC input method software that seems to signal the company is placing increased importance on search. Users of the latest version of the smart input method (which you can get here) will find that when they type certain terms, relevant search results pop up directly below the character selection bar. Sogou says this will save users massive amounts of time, as where previously they needed to open a browser and search for certain kinds of content, now they can get direct links from anywhere on their computer by simply by typing their search terms. Here’s how it works:

These results don’t pop up for every word you type, though, it only happens for certain kinds of terms: movie and TV titles, songs, app titles, e-services like banking, public transportation, the weather, etc. So if you have the Sogou smart input method installed, every time you type “weather,” a little window will pop up, showing you the local weather. Every time you type the name of your favorite song, links will pop up that allow you to listen to it directly from the input method without even having to open a browser.

If you think that sounds potentially distracting, you’re right, but luckily Sogou allows you to select what environments these results will pop up in during the installation process, so if you don’t want to see them while you’re working in Microsoft Word (for example), you don’t have to. You can also choose to make the pop-up results optional so that they only show up if you click the little light bulb next to the term you’ve typed. Of course, that adds an extra click to the process, but it makes the whole thing less of a distraction while still keeping it pretty convenient.

It’s certainly a time-saver, and it could funnel a lot of Sogou’s users through Sogou search channels if it’s widely adopted. This could be damaging to Baidu (and to its less-popular search competitor Qihoo) because many of its top searches are for entertainment or other content that might be covered by the Sogou app. But at present, the new smart feature is a voluntary add-on, and it remains to be seen how widely it will be adopted among Sogou’s user base.

I downloaded the new input method to take it for a test drive and was reasonably impressed. Because I had set it to pop up only when I clicked a button, the search results were never intrusive, and sometimes it was a bit faster than searching conventionally would be. With that said, there did seem to be a few bugs in the system. When I typed “weather,” it gave me Beijing’s weather, which isn’t particularly helpful since I am about 7,000 miles away from Beijing.

Sogou takes a second to find results when I type ‘train tickets’ into the Baidu search bar.

Also, because the search is designed to redirect you to Sogou products, sometimes it actually adds a step to the process. When I searched for “Miss Puff” (which is a Youku original TV show) and clicked on the search result for the show, it took me to a Sogou page that required me to click again to be redirected to the Youku page where I could actually watch the show. But when I searched “Miss Puff” on Baidu, there was a direct link to the show’s fourth season on Youku right on the top of the first page. Of course, this issue is likely to apply only to content that Sohu and Sogou don’t own the rights to, so for many searches, using Sogou’s input method search really is faster.

So will searching directly in input-method software catch on? That remains to be seen. Baidu does have its own input method software, so it could easily implement a similar feature set (and I will be surprised if it doesn’t), but Sogou has a bigger user base. Although the smart IME currently only works for Sogou’s PC input method, I wouldn’t be surprised to see a similar mobile product rolled out soon as well. It’s starting to look like this could be as interesting a year for search in China as last year was.

From left to right: Pony Ma, Lei Jun, Robin Li

It’s spring in Beijing, and China’s yearly celebrity parties legislative conferences (the “Two Meetings”) are being held in the capital. Among them is the National People’s Congress (NPC), which boasts among its members two new representatives: Xiaomi CEO Lei Jun and Tencent CEO Pony Ma. But the NPC doesn’t have a monopoly on the stars of China’s tech industry. The other meeting, the Chinese People’s Political Consultative Conference (CPPCC), is also welcoming a new representative: Baidu CEO Robin Li.

So China’s tech giants are out in force in China’s legislature. Neither the NPC nor the CPPCC wields much real power, but that hasn’t stopped any of these guys from making proposals. So what have these fine gentlemen suggested so far? Let’s take a look!

Xiaomi’s Lei Jun: Cut away the red tape for startups

Lei Jun’s proposals this year are focused on making things easier for startups. In his NPC proposal, Lei lists five problems and proposes solutions for them.

• Problem: The government industry and commerce organizations often force new companies to register legal documents using specific forms and structures because its employees don’t have the time or expertise to assess the legality of more customized documents, even though those may be better for companies. Solution: Let companies and their lawyers take responsibility for the legality of their documents and don’t require industry and commerce organizations to assess them.
• Problem: In cases of premium capital increase at an LLC, the Industry and Commerce officials only investigate and certify the capital that is on the books when the company is registered, and not the premium increase in addition to what’s on the registry. Solution: The Ministry of Industry and Commerce should start investigating and certifying all of the capital.*
• Problem: Registering a company name can be a long and inconvenient process. Solution: Increase options for communication (such as phone and web communication) and implement web tools to streamline the name-registration process.
• Problem: Official industry and commerce organizations require a specific number to be filed along with a pledge of stock rights, even though some pledges of stock rights aren’t for specific sums of money but rather for fluctuating sums tied to stock prices, voting shares, etc. Solution: Don’t require the registration of a specific sum in some cases.
• Problem: Buying enterprise invoices can become expensive as there are only a few authorized printers and little wiggle-room for debate on price. Solution: Make them free, like other invoices.

Tencent’s Pony Ma: The government should embrace the internet, support tech companies financially

Perhaps unsurprisingly, Pony Ma’s NPC proposals also focus on improving China’s startup environment. According to Sina Tech, he has so far made three proposals:

• The government should support startups by pushing big companies to create epayment, microfinance, and capital investment platforms that will improve the startup supply chain. The government should also establish its own organizations to support and invest in startups, as well as cracking down on IP violations and law-breaking.
• China needs to put more strategic emphasis on the internet by doing three things: establishing a single organization with clear-cut responsibilities for managing the internet, increasing subsidies for basic telecommunications services, and speed up the move to the web when it comes to government and social services.
• China should do more to assist tech companies as they move out internationally by actively participating in international trade agreements and safety standards as well as providing additional support and assistance to internet companies and even establishing an “internet commissioner” in overseas Chinese embassies.

Baidu’s Robin Li: Don’t require real names to use public wi-fi

Robin Li’s proposal to the CPPCC is focused on making public wi-fi faster and easier to use. According to Sina Tech, the current regulations governing public wifi require wifi providers to track and store users real names, and what sites they visited. Public wifi time is also limited, and logging in is difficult. Li’s proposals states:

Under the current system, wi-fi loses the convenience and speed that was originally the point, and raises the difficulty and threshold for using wi-fi to the extent that many people have just given up on it. When you make users take one extra step, you lose 90 percent of them.

Li has two recommendations for combatting this:

• Lower the threshold for getting online by eliminating the real-name and phone number requirement for some public wifi locations.
• Use a web-exclusive ID for logins (such as an email address or a weibo account), don’t require an authentication code every time, and that should solve the problem of repeat registrations and get everybody online more quickly and conveniently.

We probably won’t see more formal proposals from these guys this year, but that doesn’t mean they’re going to keep quiet for the rest of the session, and other luminaries in China’s tech industry will probably also make use of the Two Meetings to call for changes in China’s tech scene. We’ll be keeping our ears to the ground to bring you all of the latest in the Two Meetings tech madness, so stay tuned!

(images via Forbes, therichest, kelikuru)

*This one involves a lot of financial jargon and we’re not 100 percent sure we’ve gotten it exactly right, so we’ve contacted Xiaomi for a bit of clarification and will update the post if needed.

The Baidu Antivirus app is free and supports everything from XP right up to Windows 8. A Baidu representative could not be drawn to comment on this new release.

In fact, Baidu Antivirus is not entirely new, as the search company launched it under the ‘Baidu PC Faster’ name in Thailand last year, where it was offered for download on a different homepage in both English and Thai. But this new site is the first time that it’s being marketed solely in English to a potential global usership.

Baidu’s biggest export so far seems to be its mobile browser app, which is being particularly aimed at the Middle East and North Africa.

While Baidu’s new app is a challenge to other free antivirus companies around the world, it’s what the app doesn’t do yet that’s more significant. This app is not available in Chinese right now, but it surely will be at some stage. Perhaps this overseas launch is a testing ground before releasing it in Baidu’s home market. When it is made available, Baidu Antivirus will mark a new front in the increasingly intense battle between Baidu and local rival Qihoo (NYSE:QIHU).

That rivalry escalated last summer when Qihoo – which made its name with antivirus apps – launched a search engine that quickly garnered 10 percent market share. Baidu has even started a $15 million lawsuit over some of Qihoo’s search tactics. Qihoo is also under fire from authorities and some security experts over the behavior of its antivirus and desktop browser apps, which are claimed to be doing too many things without seeking the computer owner’s permission.

It’s not clear if Windows users will be too keen on a Chinese-made security app at a time of huge anxiety over hack attacks originating from China. The Baidu Antivirus app is badged as being made by “Baidu (Hong Kong) Limited” on its homepage, despite the firm being based in Beijing.

(Image: thecolor.com)

Latest stats from Baidu (NASDAQ:BIDU): they’re handling over five billion search queries per day.

Okay, let’s look at what that five billion means first. As Kaiser Kuo, director of international communications at Baidu, stated:

That figure includes search queries on all of our vertical search areas, our community sites, our Baidu Union partner sites, across all devices. Of course the overwhelming majority of those are from China, but we do have searches from on average over 130 countries.

Thus, this staggering number consolidates every search query across all Baidu domains. Nevertheless, that’s still bigger than what I estimate to be Google.com’s daily search queries, which is based on a release from Search Engine Land August last year, nailing Google search queries at 100 billion per month. If my math’s right, that means about 3.3 billion per day.

I’ve reached out to Google for their numbers, but no response as yet.

Keep in mind, this does not include Google’s many other domains like Youtube, Gmail, Google Apps, and more. But it’s still a lot.

Baidu’s new daily deals site, which came online very quietly this week.

We tend to write about daily deals sites in China shutting down, not opening up. So this week’s quiet launch of a new deals portal run by Baidu (NASDAQ:BIDU), China’s top search engine, is a bit of a novelty. The new ‘Baidu Group Buy‘ site, to translate its name very literally, currently only serves up deals in Beijing and seems to be a beta release. We reached out to Baidu HQ in Beijing, but a representative couldn’t comment on this new roll-out.

It’s not Baidu’s first venture into Groupon territory. The search company already has a deals aggregator site (using the same brand name, which is confusing), and previously ran the You’a Tuangou site before that got spun off and left to You’a to run. And so the new Baidu Group Buy is the company’s main challenge to a wealth of local rivals for food, fashion, and leisure deals.

As we observed recently, a deals site in China now needs in excess of $32 million in revenue per month in order to be considered a top player. Alibaba’s Juhuasuan dominates the sector with 47.8 percent market share, with Meituan second (13.1 percent), and Dianping third (8.6 percent). Groupon’s China site, Gaopeng languishes in ninth place in this most recent market share data:

(UPDATE: Corrected the ‘$32 million’ figure mentioned above after a correction was issued from our original source).

(Hat-tip to Techweb (article in Chinese) for spotting this)

Baidu’s developers tools are now in English.

All the information for developers is on this new English site, which will be launched officially tomorrow. At the moment it’s quite basic, but Baidu’s director of international comunications, Kaiser Kuo, explains:

Right now, there are only brief explanations about the tools and resources we’re making available, but in the coming months we’re going to make all the documentation available in English to give app developers outside of China everything they need to distribute apps through Baidu.

There’s a definite emphasis on mobile amongst all these developer tools. Indeed, Baidu has been focusing on mobile a lot more so as not to be out-paced by Chinese netizens jumping onto smartphones and tablets. Earlier today we noted that Baidu has seen an 11-fold increase in mobile searches in the past two years. A few weeks ago, the company said it has 80 million mobile app users, using things like Baidu Maps or the Dropbox-esque NetDrive app.

Baidu’s core products remain only in Chinese, but the company has some interests in Egypt and the Mid-East, some apps in Thailand, its Tieba social forums in Vietnam, a badly loss-making search engine in Japan, and a relatively new research lab in Singapore. That last aspect suggests Baidu might be prepping to take its core search engine into Southeast Asia in the future.

Monetizing Android apps in China

As well as making all its tools available to global developers, Baidu is also pushing its third-party Android market, called the Baidu Mobile App Center. The Chinese search giant is encouraging global developers to try out its tools and then also list their apps in the Mobile App Center, which launched in mid-2011. In a country where Android is hugely popular – much more so than pricey iPhones – but local consumers don’t want to be trapped in the entire Google ecosystem, there are dozens of such third-party Android app stores. Between that store and Baidu’s in-app ad platform, it’s amounts to an alternative way for global Android developers to monetize from Chinese users – and it’s a full-on challenge to Google.

One useful thing that developers and site owners might want to check out – once the full resources get translated – is the SiteApp tool which is a neat way of making a mobile website pretty easily.

The quarterly mobile reports from Baidu (NASDAQ:BIDU), China’s most used search engine, are always full of facts and stats about growing mobile usage among Chinese netizens. The newest report came out today, revealing lots of new milestones.

Prime among these is the fact that Baidu has seen a 1,000 percent increase (UPDATED to correct my percentage) – yes, an 11-fold rise – in mobile visits to its search engine from the start of 2010 to December 2012:

How did Baidu collect this data? A representative explains to us:

The data for this report was collected through Baidu mobile search results (including app-driven searches, searches through pre-installed search tools, and browser-based searches); Baidu Mobile App Center (as.baidu.com); and Baidu mobile analytics.

More mobile searches than ever were met with mobile-optimized websites in China, with Baidu saying that 80.02 percent of searches went to mobile-adapted sites in Q4 of last year – that’s up from 69 percent in Q3. Baidu itself has been pushing this, launching a service called SiteApp a few months ago to form simple mobile sites for businesses.

Focusing on companies with medium- to large-scale websites, Baidu found that 47.8 percent of those now have mobile websites:

Not shown on that graph is that 16.9 percent of large and medium websites have developed native mobile apps, while 5 percent of such sites have mobile-optimized sites developed using HTML 5.

China’s mobile searches

As previous stats from Baidu have shown, China’s mobile users are slowly dropping Symbian for Android and that the iPhone is the single most used device in terms of Baidu pageviews. So what are all those people searching for whilst on their phones? The top searches by mobile search users were releated to reading (16 percent), shopping (9.5 percent), utilities (8.2 percent – whatever those are), and location-based services (7.3 percent). These four interests account for 41.4 percent of total search traffic on Baidu mobile search:

Baidu also notes that mobile activity on its sites are always “climbing at the end of the workday” and tend to peak from 9:30pm to 10pm each day, proving that a lot more leisure time is being spent on mobile devices in China, as in many other nations.

According to my imagination, this is what Qihoo’s web-crawling bots look like.

It’s no secret that Baidu and Qihoo 360 aren’t friends. So it likely shouldn’t come as a surprise that Baidu’s $15 million lawsuit against Qihoo couldn’t be settled out of court between the two parties and is now headed into the court system for legal proceedings.

The dispute revolves around Baidu’s robots.txt files. Nearly all websites have robots.txt files that serve as a notification of what “spiders” — the web-crawling bots that search engines and other web services use to index websites — are allowed to crawl the site. This function exists to allow people to control where their sites are listed, and to protect their servers from being overrun by web-crawling spiders that have gone amok. Generally, if a spider sees in a website’s robots.txt file that it has been disallowed from indexing the site, it simply moves on to the next website without indexing the site in question.

But when Baidu added Qihoo’s spiders to robots.txt files on its services like Baike to stop Qihoo from making use of Baidu’s content, Qihoo apparently reprogrammed its spiders to ignore the robots.txt file and crawl Baidu’s site anyway. Baidu’s lawsuit contends that this constitutes a violation of industry practices and amounts to an illegal seizure of Baidu’s intellectual property, and the company is seeking 100 million RMB ($15 million) in damages.

Speaking with the China Business News, a Qihoo representative characterized the robots.txt file as a good-faith request, not a hard-and-fast requirement. Qihoo also stated that content from Baidu Images, its Baike wikipedia service, Baidu Music, Baidu Knows, and more should not be considered Baidu’s intellectual property under copyright law because much of their content was submitted by users. (Not coincidentally, these are the same services Baidu is accusing Qihoo of using its web spiders to copy from).

It’s not clear what will happen with the lawsuit in court. The robots.txt file is not explicitly addressed in the law, but Baidu may be hoping to take Qihoo down with one of China’s commerce laws that, in rather vague language, suggests that companies must compete fairly and respect publicly-known industry standards. But it’s also possible that this lawsuit — not the first public spat in China’s web industry over a robots.txt file — could spur the government to clear things up once and for all by passing legislation that addresses the robots.txt file directly.

Baidu declined to comment on this story but did confirm to Tech in Asia the basic details of it were correct and that the case will indeed be heard by the court.

UPDATE 10:00: In a statement to Tech in Asia, a Qihoo representative said:

We don’t believe Baidu has any merit in this case. We will vigorously present our case to the court.

Regarding our view on robots.txt [...] we will follow robots.txt as along [sic] as robots.txt is not being abused by competitor[s] to unfairly block our access.

(China Business News via Sina Tech, image source)

Coming soon to a Chinese website near you.

Last week, we learned of a ban on TV advertising luxury goods in China issued by SARFT that is preventing luxury goods advertisers from reaching their consumers through television (and billboards) during one of the most lucrative times of year (with Spring Festival and Valentine’s Day both traditional drivers of luxury sales). So what’s a luxury advertiser to do? Turn to the internet.

As this Seeking Alpha report suggests, the luxury goods ad ban could be great news for Baidu (NASDAQ:BIDU), as luxury brands may turn to the web to get their messages out. Baidu is one of the Chinese web’s biggest advertising providers, and it certainly stands to benefit both in the short term and the long term from this TV ad ban, as vendors who buy successful ad campaigns online will be more likely to stick with web ads in the future instead of returning to TV when and if SARFT’s ban is retracted.

But Baidu is far from the only company that could benefit from a luxury advertising influx. Video streaming sites like Youku (NYSE:YOKU) could also see big bumps as luxury advertisers whose TV spots now can’t be aired move their money into digital video ads. And of course, many of China’s other web portals offer more traditional advertising solutions that luxury advertisers may be interested in. Ads on popular e-commerce sites could see a price spike. Even Baidu nemesis Qihoo could see an influx of cash via ad buys in its search results.

Of course, until we see this quarter’s financial results, it will be impossible to tell just how much of an impact SARFT’s ban has actually had, and who has gotten the biggest advantage out of it. I wouldn’t be at all surprised to see a lot of Chinese internet companies, and especially Youku and Baidu, see a numbers bump as a result of the ban. I expect that Youku and other streaming video sites may end up getting the best of this new ad influx, but of course I’m just speculating.

Whatever happens, it’s got to be good news for China’s web ecosystem, and that’s a happy surprise. Usually SARFT busies itself with trying to ruin the internet, so it’s nice to see that for once a SARFT regulation could actually be helping out Chinese web companies.

(via Seeking Alpha, image source)

To say that Qihoo and Baidu don’t like each other would be an understatement. The two CEOs (Zhou Hongyi and Robin Li respectively) have a personal feud that goes back years and that has clearly bled into Qihoo’s strategic planning. Recently, the blustery Zhou has been unusually quiet in the press, and has resolved several disagreements with other tech CEOs. The prevailing theory in the industry seems to be that he has decided to focus on his “true” enemy: Baidu’s Robin Li.

To that end, Time Weekly is reporting that it has obtained information suggesting that Zhou recently met with Sogou CEO Wang Xiaochuan in secret. Although they have sparred in the press before, supposedly at this secret meeting the men discussed a possible partnership between their companies in the search arena. Does that mean that Sogou and 360 Search are going to come together and try to take down Baidu as one unified search engine? Who knows. The meeting and whatever plans the men may have made remain purely a rumor, although both men declined to comment when asked by reporters from Time Weekly whether the meeting had occurred.

Even if a secret alliance — how dramatic sounding! — was formed, though, it will be a long road to the top. 360 Search and Sogou are the second- and third-biggest search engines in China by traffic, but there is still a vast gulf between them and the number one spot. In December, for example, their collective percentage of search engine pageviews in China adds up to just over 18 percent. While that’s certainly nothing to scoff at, it’s still a far cry from Baidu’s dominant 71 percent.

Still, the fact that Zhou has apparently squashed his beef with Wang and Sogou is indication enough that Zhou is dead serious when it comes to taking down Baidu. And of course, Baidu has been making a few moves that seem aimed at taking Qihoo down a peg, too. Although conflicts have been flaring between the companies over the past half-year, it seems possible that this is only the beginning. The first battles have been fought, but a much bigger Baidu-Qihoo war appears to be on the horizon.

(Time Weekly via Sina Tech)

The newcomer: Baidu Shopping launches today, albeit nearly three years after its main product search rival.

We’ve seen product search engines becoming a major battleground in China in the past year or so, but the country’s top search company was not playing along. Until today. Now Baidu (NASDAQ:BIDU) has its own e-commerce search at gouwu.baidu.com – literally ‘Baidu Shopping’ – that indexes items from most of China’s online retailers.

While the desktop site came online just today, we see that Baidu Shopping sneakily emerged as iPhone and Android apps a few weeks ago. This new feature is not yet one of the seven options on the main Baidu.com homepage above the search box, but it will presumably be added in due course.

The main rival to Baidu Shopping in China is eTao, which launched back in October 2010. It’s a dedicated product search engine run by Alibaba Group, the huge Chinese e-commerce company behind sites like Taobao and Tmall. In late 2011, a handful of e-tailers decided to block and boycott eTao so as not to bolster their main rival’s own search facility, despite Alibaba’s insistence that it was a fair and “agnostic” shopping search engine.

As well as indexing products on e-commerce sites like Tmall, 360Buy, Amazon China, QQBuy, Vancl, and many more, Baidu Shopping also brings up items on social commerce Pinterest clones such as Mogujie and Meilishuo.

Baidu Shopping, however, won’t have any competition from Google, as the American giant’s Google Shopping search for Chinese consumers closed down in December.

Baidu revealed its Q4 and full-year 2012 figures yesterday, but markets reacted very badly to the fairly positive figures, fearing stronger rivals such as Qihoo in its core search and ad platform business, and disappointed by a halving of revenue growth. After closing at $107 per share on Monday, $BIDU opened at $99 and then slid a bit further. It’s currently at $97 in early Wednesday trading.

(Source: Marbridge Daily)

China’s top search engine Baidu (NASDAQ:BIDU) cranked out its full-year and Q4 2012 financial report yesterday. Before looking at the conventional figures, let’s look at how Baidu’s mobile apps and services are performing. Founder and CEO Robin Li said a while back that he was expecting three times more mobile revenue in 2012, so it’s clearly a crucial area for the business. The key mobile stat for Baidu is that its suite of cross-platform apps now have 80 million users.

As spotted by TheNextWeb today, Robin Li said in last night’s results call that:

Of course, there is a lot of work ahead of us as we transform Baidu for a new world of mobile. But we are off to a great start. Our internal tracking shows, Baidu is a clear market share leader with around 80 million daily active users for our flagship web search product on mobile. We expect this trend to continue as Baidu search results become more and more location specific and personalized.

That’s a small bump up from the 77 million mobile app user figure that Baidu revealed in October when the company spun off its location-based services (LBS) division. Baidu did so in order to focus even more on its mobile software, such as its iOS and Android creations. Those include Baidu Maps, which is China’s second most used mobile maps app behind Autonavi’s.

Popular: Baidu Maps app.

Li said that Baidu Maps saw installations “grow over 50 percent quarter-over-quarter in Q4.” He claims that it’s actually the top maps app in China in terms of daily users (possibly in contradiction to the above market share stats) “with over 3.5 million daily active users.”

Mobile reinvention

Speaking of Baidu’s mobile apps and cloud services, Li added in yesterday’s report:

Baidu once again posted solid growth in 2012 amidst challenging macro conditions. Similar to the early days of the internet, this is a time of boundless innovation, creativity and opportunity in our industry. We are at the heart of the internet in China and we’re excited to embrace and lead the next stage of mobile- and cloud-centric Internet growth.

Of course, the current situation is also very unlike the beginning of the web, as a lot of other Chinese major rivals and startups are now ahead of Baidu in some key areas. For example, Baidu is still without a social success, aside from its rather web 1.0 style BBS which is called Tieba. Also, one could argue that Baidu is not doing local listings and reviews as well as the Yelp-like Dianping. Plus, Baidu is a relative latecomer to mobile-based cloud services like file storage, though the company said recently that its Dropbox-esque NetDrive (pictured above) has over 30 million users.

On top of all that, new challengers emerge all the time for Baidu, such as Qihoo’s new search engine last year. It’s also trying to battle Siri and Google Now on smartphones with its own ‘Baidu Voice Assistant’ app for Android.

As for the money shots, Baidu posted revenues of 6.335 billion RMB ($1.017 billion) in Q4 2012, up 41.6 percent from the same point in the previous year. Its full-year 2012 revenues sat at 22.306 billion RMB ($3.580 billion), a rise of 53.8 percent from 2011. Profit for the full year was 11.051 billion RMB ($1.774 billion), growing 45.9 percent from 2011.

Baidu-owned (NASDAQ:BIDU) travel e-commerce site Qunar is aiming to grow its sales revenue to 1 billion RMB – that’s US$160 million – by the end of 2013. Qunar CEO Zhuang Chenchao said recently, as spotted by Bloomberg, that such a sales figure would be double its level at full year 2012.

Turning to talk about mobile commerce, Zhuang added that Qunar’s mobile apps have been downloaded more than 25 million times so far, and that should help the online travel agent get 20 percent of bookings via its apps. Last year, 15 percent of all bookings came from mobile users. A few other tidbits that the CEO revealed:

• Qunar has lots of room for growth, as only about 15 percent of Chinese travel bookings are made online.
• The site manages a 40 percent profit margin on its air ticket sales thanks to mostly online sales. In contrast, rival Ctrip relies more on phone sales, which involve higher overheads.
• Qunar expects hotel booking sales to account for 40 percent of total revenue in 2013, up 10 percent from the previous year.
• Qunar handled 150,000 flight reservations a day last December.

A private company throwing out all these numbers rather feels like Qunar is trying to butter up potential investors for an IPO this year. Indeed, Qunar is one of many Chinese web companies shooting for a US IPO this year, and the company had previously indicated that it was waiting for a stable market after the tumult of 2011 and 2012.

The travel e-commerce market leader in China is Ctrip, which saw net revenues of 4.2 billion RMB ($668 million) in the whole of 2012, which was up 19 percent from 2011. In second position within the hotel booking sector is Elong.

Zhuang also claimed last week that the site surpassed Ctrip in the fourth quarter of last year as the top e-tailer of airline tickets.

Qunar is also under pressure in terms of hotel bookings from a variety of mobile-only startup apps. One such new rival is BingDian, which last October wrapped up a round of series A funding.

A few days ago, we saw Qunar spotlight its luxury hotel offerings with a new section devoted to boutique and five-star hotels.

Baidu-owned (NASDAQ:BIDU) travel e-commerce site Qunar today opened up a luxury hotel section on its site. Packed with over 2,000 high-end hotels in some of China’s top cities and holiday destinations, it represents an inevitable play for China’s blossoming luxury e-tailing sector.

The new Qunar luxury portal is on the lh.qunar.com subdomain, and bears a more minimalist and sophisticated look than its regular frontpage.

It contains nothing that Qunar didn’t already offer on its site for years, but now its top hotels have been compartmentalized and presented on a much nicer page. So it’s a pretty minor roll-out, but a smart move to make, allowing Qunar to better showcase its hotel chain partners, such as Hyatt and Shangri-La, and the numerous boutique and designer hotels that are available. For now the new luxury hotel portal is focusing on just 10 cities.

Qunar revealed to Chinese media today that 21 percent of the site’s bookings are for hotel rooms that cost over 500 RMB (US$80) per night, so it made sense to spin-off these offerings. In addition, Qunar claimed that, compared to its major rival Ctrip, which is China’s top online travel agent, the Baidu-run site is able to offer a 10 percent lower price than Ctrip on 64 percent of its five-star properties.

Qunar faces stiff and diverse competition in both the top-end and normal travel segments in China. At the higher price points there are very specialist, tailored travel packages being sold by startups like Zanadu and TripTM, the latter of which was acquired by Ctrip last year. At the lower-end of the scale there are mobile-oriented travel e-commerce apps popping up, such as Bingdian and Hotel Finder.

Baidu took a majority stake in Qunar in the summer of 2011 thanks to a $306 million investment. It’s rumored that the subsidiary could be one of many Chinese web companies shooting for a US IPO later this year.

(Source: iMeigu – article in Chinese)

Those in blue vests are Ford support engineers.

China’s top search engine, Baidu (NASDAQ:BIDU), held its first ever hackathon in conjunction with another company over the weekend, buddying up with automaker Ford (NYSE:F) to reward developers in a hackathon for coming up with new in-car apps.

As we noted earlier this month, Ford is pushing its in-car ‘Sync’ dashboard to geeky drivers in China, recently adding support for using voice commands to post to Sina Weibo.

The joint Baidu-Ford hackathon took place in Beijing over the weekend where 26 individuals and self-organized teams hacked together 26 in-car apps using Ford’s AppLink API for voice-control in Sync apps and Baidu’s tools in its developer center. In addition, the search company says it “opened new APIs, including music and facial recognition, especially for this hackathon.”

Baidu’s announcement today explains:

Some of the integrated apps allowed drivers to send SMS or post Weibo or microblog entries by voice, while others enabled drivers to ask questions about buildings, billboards or landmarks they drove by, with answers pushed to their cars from the cloud. Another app detects a drowsy driver with facial recognition technology, waking up droopy-lidded drivers with a high-volume song — and texts friends automatically with the driver’s location and a request for help.

Click to enlarge. (Photo from ‘baidudev’ on Sina Weibo)

From photos of the hackathon posted to Sina Weibo, it seems there was a lot of frantic coding, awkward tabletop napping, and noodle slurping going on. In addition, some engineers from Ford were on hand to provide guidance.

The winner was Ms. Gao Yuan (pictured right) who took home a giant ticket to the Mobile World Congress in Barcelona in February. Her winning hack was “a simple two-option multiple choice quiz game with the driver, ranking the score among all drivers using the app.”

As with the late-arriving Google Drive, China’s Baidu (NASDAQ:BIDU) was a bit late to the cloud storage game, launching its consumer-oriented NetDrive (“WangPan” in Chinese) in March of last year. Today the search engine company has revealed that Baidu NetDrive has seen pretty keen adoption, rising to 30 million registered users by the end of last week.

Baidu adds that the NetDrive number grew by 10 million users in just the last month, and the Beijing-based firm hopes to “have 100 million users by year’s end.”

Giving 5GB of free space, it’s quite a way behind Microsoft SkyDrive’s 25GB of free storage, but Baidu’s cloud storage is expandable by an extra 10G free if users do some social tasks like invite friends to the service, or post about it on their Weibo pages. Plus, with Baidu’s open API incorporated, the cloud service can sync data with some popular third-party apps, like girls-oriented photo-sharing app MeituXiuXiu or the music streaming service YinYueTai.

Baidu’s NetDrive is also an integrated part of its cloud-oriented, Android-based mobile OS, which last August launched with its third hardware partner to form the TCL S710 smartphone (pictured above).

While Baidu has been very quiet about how many Baidu Cloud OS phones it has shipped, the company did reveal some other numbers today. The Baidu mobile IME app for typing Chinese has reached 100 million users, and Baidu Maps mobile users have passed 77 million, with an anticipated 100 million on the Maps apps by the first quarter of 2013. As we noted a few months ago, Baidu’s mapping app is now China’s second-largest with 19.1 percent market share.

2011 saw economic turmoil and financial scandals that led to only two Chinese tech companies venturing to IPO in 2012. But 2013 is looking up. This year there’s the distinct possibility of there being nine major Chinese web company IPOs, among which will be the biggest ever that China has produced.

Buoyed by the solid progress of the small class of 2012 (VIPShop and YY), these are the names to look out for in the year ahead. Inspired by a longer list on QQ Tech, we’ve pruned that down to nine realistic contenders. Some of these Chinese internet companies have been more candid than others when it comes to intent or timing, but they are, to varying extents, likely to be hitting the stock tickers in New York or Shanghai in the months to come.

1. Alibaba

Let’s start with the big daddy, Alibaba Group, which runs market-leading e-commerce sites like Tmall and the iconic Taobao. Just yesterday we wrote of how Alibaba, according to rumor, has already hired two underwriters for its public listing in Hong Kong, thought to be coming mid-2013. Alibaba could well raise US$3 billion to $4 billion at a valuation of $35 billion to $40 billion. Yahoo owns a 20 percent stake.

2. 360Buy

It’s difficult to determine which would be the second most valuable company to go public, so the rest of this list is in no particular order. Though I think 360Buy is the next largest. It’s the main rival to the afore-mentioned Tmall in China’s fiercely competitive B2C e-commerce industry. In November of last year 360Buy attracted $400 million in series D funding, which effectively values 360Buy at $7.25 billion.

2013 has long been pegged as 360Buy’s IPO year, so it’s a case of the online store balancing its ability to attract investors despite a lot of losses on the books with the need to raise a realistic amount. Last year’s reports of it raising up to $5 billion by a public listing might prove to be seriously exaggerated.

3. Sogou

Sogou is the search engine and software division of Sohu (NASDAQ:SOHU). It’s third in China’s volatile search market with 7.92 percent share of pageviews (a few percent above Google) at the end of last year.

Sogou is Sohu’s top earner and has been for 10 consecutive quarters. Sohu bought back Alibaba’s 10 percent stake in Sogou last summer. It’s now ripe for being spun off and floated.

4. Qunar

Qunar has been rumored to be working towards an IPO this year for quite some time, and the CEO of this online travel site even said in January of last year that a listing made sense as soon as “the market stabilizes.”

China’s top search engine, Baidu (NASDAQ:BIDU), invested $306 million in Qunar in the summer of 2011, thereby taking a major stake in the travel store.

5. Vancl

You’ll notice that all but one of the list so far are e-commerce companies. And here’s another. Vancl runs both an own-brand store (like GAP or Uniqlo) online, as well as the V+ open platform mall. Vancl CEO Chen Nian explained recently how its cancelled US IPO at the end of 2011 turned out to be a bullet that he very narrowly dodged. There’s an interesting anecdote about how George Soros helped out.

As with Qunar, the wait for markets to improve is surely over for Vancl.

6. UCWeb

The UCWeb listing is one of the most likely of this bunch. The makers of the hugely popular UC Browser for smartphones, which has over 400 million global users, have made it clear that 2013 is their ticket. CEO Yu Yongfu has already explained that “It would be better for us, branding-wise, to be listed in the US. It would expand our brand name and make us better known.”

7. Cloudary

A particularly likely US venturer is the Shanda (NASDAQ:SNDA) spin-off Cloudary, which is its e-book platform subsidiary. A ringing of the bell at the NYSE sometime in April is rumored to be in the cards. Shanda Cloudary – formerly dubbed Shanda Literature – recently appointed a new chairman in ‘Robert’ Qiu Wenyou, a former investment banker at Merril Lynch.

Cloudary, as we saw with Vancl, is another cancelation casualty of a grim capital market towards the end of 2011.

8. Dianping

Heading back into the realm of e-commerce again, Dianping is often called “China’s Yelp” and is also the country’s third-largest daily deals site. But Dianping has not been outwardly chasing an IPO, so this one is far from certain. Nonetheless, the deals service has matured a lot in recent years and now has a claimed 40 million mobile users, so it’s at the stage where it might be ready to go public.

Dianping raised $60 million in fourth-round funding a few months ago.

9. Xunlei

Another 2011 IPO withdrawal, Xunlei is very keen to list to raise funds for its growing video streaming site. Back then, Xunlei was aiming to raise $200 million.

Trouble is, Xunlei also has a P2P file-sharing network that’s riddled with piracy. On top of all that liability, Xunlei’s main site is over-reliant on advertising, which is an unreliable source of sustenance. Nonetheless, Xunlei is very likely to resuscitate its 2011 IPO plans pretty soon, now that 2013 is looking like a much better climate for Chinese tech stocks.

(Hat-tip to QQ Tech for the partial list of names)

If anyone had any doubt there was bad blood between Baidu (NASDAQ:BIDU) and Qihoo 360, here’s some more evidence to convince you: after its recent move into security software in Southeast Asia, Baidu is looking to take on Qihoo 360 on its home turf with an investment in Qihoo security rival Kingsoft. According to some reports, Tencent is even involved in the deal, which will see the companies partnering up to launch a security suite that will compete directly with Qihoo’s line of products.

Qihoo CEO Zhou Hongyi is, unsurprisingly, not particularly happy about this. In an interview with Sina Tech, he said of the Baidu-Kingsoft partnership:

We wish that Baidu would compete with Qihoo directly. Two big monopolies joining hands to create a pawn in order to monopolize [the security market], all in the name of breaking [Qihoo's] monopoly…that’s the biggest joke on the Chinese internet.

It’s understandable that Zhou would be upset. Qihoo stock (NASDAQ:QIHU) dropped six points on the news of the Baidu-Kingsoft investment, and it has recovered only slightly since then. But Zhou may yet get a shot at revenge; rumor has it that Qihoo is working on a potential partnership with Google. And so the war rages on…

[via Sina Tech]

Some pre-set categories and sites in the new Baidu mobile browser for Middle East and north Africa.

Chinese search engine Baidu (NASDAQ:BIDU) has teamed up with mobile telco Orange (NYSE:FTE) to bring its Android web browser to north Africa and the Middle East. The app, called El Browzer for its new markets, is a reworking of the Baidu Mobile Browser that was initially made for Chinese smartphone owners.

Baidu’s El Browzer is available in Arabic, English, and French, and will come preinstalled or be made available for download on all Orange Android devices across Africa and the Middle East (AMEA). The new browser is already available today for Mobinil, Egypt’s France Télécom-Orange subsidiary, and is the version we’ve tested out in these screenshots; other versions across the region will roll out in due course. Orange has nearly 80 million customers in AMEA.

The Baidu Browser app is also available in a general global version for Android. That’s a direct challenge to Opera, as well as Chinese rival Tencent whose QQ Browser has over 16 million overseas users. But China-made UC Browser is way ahead with over 400 million global users.

Baidu’s director of international communications, Kaiser Kuo, tells TechinAsia that Southeast Asia, the Middle East and North Africa, and Latin America are already established as the “three chief target areas” for the company at the moment. Baidu’s links portal, Hao123, has had an Arabic version (see here) for about a year, and, Kaiser adds, its “user uptake has outpaced our expectations” thus far.

Orange’s senior VP for AMEA, Marc Rennard, said in today’s announcement:

The appetite for mobile internet services is very strong in Africa, for example demand for Android devices in Egypt has doubled in the second half of this year. Price and access have been a barrier to entry, but partnering with innovative companies like Baidu provide unique solutions that give our customers affordable access to all the services they desire without compromising on features or ease-of-use. Building on the partnerships we’ve signed with major brands such as Wikipedia and Facebook in AMEA, we continue to innovate in Africa and honour our commitment to make the internet accessible to all customers across our footprint.

Google it

This browser deal across AMEA does not include Baidu’s own search engine, and the new browser app – in the Mobinil version for Egypt, at least – defaults to Google Egypt in Arabic.

When Baidu massively revamped the original Chinese incarnation of this browser in September of last year, the company boasted that it’s currently the fastest mobile browser at HTML5 rendering with a HTML5 test score of 482. For some reason, El Browzer only scored 295 for us using the same test.

Last year we saw Baidu open a research lab in Singapore that focuses on natural language processing technology for Southeast Asia. That suggests Baidu will bring its search to markets like Vietnam and Thailand in the near future. But, for now, Baidu has been focusing on expanding other products, such as the afore-mentioned Hao123, the Tieba social forums (which recently proved controversial in Vietnam), and some desktop security apps that are being aimed at users in Thailand.

A few days ago, I wrote about a rant posted to Sina Weibo and spotted by Global Voices Online in which an alleged member of Sina’s censorship team explains the company’s censorship in part by saying that Sina doesn’t want to censor weibo posts, but it is required to do so in order to follow Chinese law.

That’s a refrain we hear from Chinese internet companies over and over again when it comes to censorship: ‘we don’t want to be doing this, but these are the rules of the game in China, and we have to play along.’ That is true, of course; any company that didn’t censor its user-generated content for the domestic market would be on the fast track to being shut down. But it is also a little bit of a lie. If these companies only censor because it is mandated by the Chinese government, why are their services still censored for users abroad?

Just a few hours ago we noticed that Tencent’s WeChat app was censoring “sensitive” words, even in some cases where both the sender and the receiver of the “sensitive” message were outside China. But Tencent is not an outlier. Weibo posts from overseas that contain sensitive words still get deleted, and politically sensitive searches are blocked for everyone, not just users in China. If I search for “Tiananmen” on Baidu from the US, I still get heavily censored responses. Every other Chinese web platform I’m aware of operates the same way; all content is censored according to Chinese law, even content that is being sent and received outside of China’s borders.

The obvious reason for this is that most of these companies have their servers within China’s borders, so content sent and recieved outside China still has to go through China along the way. When I post a message to weibo, for example, even though I am in the United States, that message has to be transmitted to Sina’s servers in China, which ostensibly have to be scrubbed in accordance with government policy. The same general principle can be applied to most other Chinese internet companies, too. So they really are trapped after all then, right?

Well, yes and no. Technically and legally, it should be possible for any Chinese company to set up servers and offices outside of China, from which it should be free to serve uncensored content to users without violating Chinese law, so long as those users were not in China. In fact, they could probably do it legally from Hong Kong (despite being technically a part of China, Hong Kong has different internet laws). And while that certainly would require some effort, many of the companies we’re talking about (especially Tencent and Baidu) already have extensive operations abroad, and virtually everybody has an office in Hong Kong.

If these companies were truly committed to freedom of speech, they could establish overseas servers and a technical process such that when I post to weibo, for example, the post might need to be hidden from domestic users but could still be displayed to Sina’s international user base. Yet none of them (that I’m aware of) actually offer this sort of service. The reason is not that it’s impossible, it’s just that it isn’t a priority.

(Granted, the vast majority of these companies’ user bases are within mainland China. But most of them also have millions of users collectively in Hong Kong and overseas in Taiwan and among the immigrants and students living in the West.)

I do not mean to suggest that Chinese internet companies are evil, or that they benefit much from censoring content. The reality is that they all know their users would be happier with uncensored content, but even in a space where Chinese laws do not technically apply, un-censoring “sensitive” things could potentially damage their relationship with the government. It seems all of these companies have made the calculation that the potential benefits gained from un-censoring overseas content do not yet outweigh the risks such a move would generate for the company’s domestic operations and continued relations with the government.

That is each company’s choice to make, and I do not condemn them for making it. To a certain extent, I buy the Sina censor’s argument that a censored weibo (for example) is still better than none at all. At the same time, though, I think the narrative of victimhood many of these companies present to the outside world — that they are forced by the government to censor user-generated content — is misleading. Any Chinese internet company could offer completely uncensored service outside China’s borders if it so chose. Most have them have simply decided that doing so would be bad for business.

That, of course, is a perfectly fair decision for a business to make. But I wonder at what point that decision is going to harm these companies’ aspirations of overseas growth. How much faster would Sina Weibo grow in Taiwan if it was uncensored? How big could WeChat be if it didn’t have the stigma of political censorship draped around its neck like a dead albatross? For most overseas users, censorship of China-related topics is going to be a little-noticed minor annoyance, but it is absolutely terrible for marketing and branding. That is doubly true if the companies are also not transparent about what is allowed and what isn’t, which is often the case on Chinese content platforms.

Just as global internet companies adjust their practices in accordance with Chinese laws and customs when they enter the country, Chinese internet companies need to embrace a freer global internet culture as they move increasingly outside their home country if they want to have any hope of competing with other global brands. Most users are not going to choose a censored platform over an uncensored one voluntarily, so if Chinese internet companies really want to make waves abroad, they’ll have to do more than just complain about their legal obligation to censor. The level of transparency and free exchange many users demand may be illegal in China, but the barriers stopping Chinese companies from implementing a freer exchange for overseas users — both existing users and ones that they hope to attract in the future — are financial and (corporate) cultural, not legal barriers.

The akwardly-named Baidu PC Faster security suite is available in two languages (English and Thai), and features four main applications: a boot-time manager, a Windows Update manager, a storage cleaner, and a Health Care that supposedly will help solve computer problems and increase security. The .co.th domain name and Thai language option make it clear that these products are target primarily at Thailand, but the English should make the system somewhat accessible throughout Southeast Asia (at least, more accessible than it would be in Chinese).

Baidu PC Faster Homepage

It’s an interesting strategic move, and likely an attempt to preempt Qihoo’s potential overseas expansion by getting to the Southeast Asian market — where it seems many Chinese companies are headed — before Qihoo. It’s the sort of move that probably really annoys Qihoo CEO Zhou Hongyi, and frankly that might be reason enough for some people at Baidu to move ahead with the strategy.

Of course, Southeast Asia is host to a number of lucrative, fast-growing markets, so it’s a smart business strategy in addition to being a slap in the face of rival Qihoo. But it will be interesting to see how the service is received in a region where being from China is increasingly a hindrance as China’s newfound assertiveness in various territorial disputes with Southeast Asia has annoyed several countries in the region. (For example, Vietnam just banned a popular Chinese video game for containing a controversial map of disputed territory).

For this reason, some Chinese companies have chosen to obscure or downplay their Chinese branding as they expand into the region, but Baidu has chosen to put its name front and center. That isn’t likely to do the company much harm in Thailand, but other countries in Southeast Asia like Vietnam and India (with which China has serious territorial disputes) may look differently on the new suite of products. It’s also worth noting that aside from keeping the Baidu branding, the company seems to be downplaying its China connections; the suite’s About Baidu page, for example, doesn’t mention China at all.

[Techweb via Sina Tech]

Some of the apps on this list are aimed solely at Chinese phone users, while a few can be used globally and support English as well. They’re mostly apps that I think are significant, or have had fun using/testing this year. Add your own picks of brand-new apps from China in the comments section. Here’s my seven:

7. Weico (WP version)

Sina Weibo, China’s biggest Twitter-esque service, is fun, but the official apps are as about as nimble as turkeys a few days before Christmas. And so the Chinese startup Eico Design is to be thanked and celebrated for making Weico, which does what most Weibo-ers need and nothing more. Earlier this year it hit the Windows Phone platform for the first time. Long before that it also graced iPhone and Android. The app is in both English and Chinese.

(Windows Phone)

6. Changba

This summer’s hottest new app for many Chinese smartphone owners was Changba, a social sing-along app. Karaoke is massive in China, and that propelled Changba to near the top of the iTunes App rankings, with an initial explosion of one million downloads within a few weeks of its launch. In the Chinese version of the iTunes Store right now, it has sunk down a bit to 71st spot.

(iOS / Android)

5. TouchChina ScenicSpots

All smartphone users have maps apps, but when it comes to traveling we’d all like some expert guidance rather than be left feeling lost, staring blankly at a map of an area we’ve never been to before. The travel-oriented startup TouchChina decided to fill this gap – and do it for free – with the great-looking ScenicSpots app. It puts tourist reviews and maps aimed at travelers all into one app, and even includes some audio introductions to some historic places. The app supports English and Chinese, making it useful for overseas visitors to the country. But ScenicSpots doesn’t yet have a comprehensive range of places to see in each city, so it cannot be relied on alone to guide you around.

(iOS / Android)

4. Papa

Papa app is hardly original, but it seemed to have that je ne sais quoi to become one of the year’s coolest new apps. It basically allows you to add voice to your photos and then share these vocal annotations with friends in the app, or via Sina Weibo. Papa has had quite a few celebrities jump on board, which is always great for early traction. In the Chinese version of the iTunes Store, it’s currently in 13th spot.

But its sole innovation is the voice comments, a feature that was very quickly copied by some Chinese Instagram-like rivals.

(iOS / Android)

3. Baidu Voice Assistant

China’s top search engine, Baidu, now has a Siri-like voice assistant. It brings smartphone-friendly, voice-activated search to Android users in China. It’s actually a bit like Apple’s Siri mixed with Google Now, though it looks more like the latter. The app itself is not totally new, but this radical v2.0 update launched on Christmas Day makes it a contender alongside what Apple and Google have to offer.

(Android)

2. Momo (Global version)

Sadly, not too many Chinese developers thought about the outside world this year, so we’ll reserve the top two spots for apps that all our readers could enjoy and make use of.

Launched globally on the iTunes App Store in October, the China-made Momo app decided to take its location-based flirting app to a worldwide audience with this separate app from its smash-hit Chinese one. The startup tells us that it uses the same back-end data as the Chinese iteration of Momo, and that the English-language app will also appear on Android in a few months’ time. It’s up against other dating apps like Skout.

Momo has a total of 20 million users, and its worldwide app has so far seen most of its downloads coming from the US.

(iOS)

1. WeChat (Global version)

Tencent’s (HKG:0700) huge messaging app hit the world stage in April with the English name WeChat, aiming to take a slice of the market from Whatsapp, Line, and KakaoTalk.

WeChat is set to surpass 300 million users after the New Year, but it’s not clear how many of them are outside of China.

(iOS / Android / WP / Symbian)

Check out the rest of our 2012 review posts. And happy New Year!

China’s tightened internet controls were passed into law earlier today. As well as requiring broadband and mobile internet providers to have full ‘real name’ details of their customers (which pretty much happens already), the new 12-article law also mandates how all web companies operating in China must control what people post. That effectively legalizes the deletion of posts that contain what authorities deem to be “illegal” content or information.

Again, that’s close to what happens already in practice with the blanket self-censorship and fast-paced moderation that goes on on the Chinese web, as seen very clearly on the Twitter-like Sina Weibo. And so the new law will criminalize companies who do not censor the web with the kind of speed and efficiency that the law now dictates. That has huge implications for social companies like Sina (NASDAQ:SINA), Tencent (HKG:0700), and Renren (NYSE:RENN), and search engines from Baidu (NASDAQ:BIDU), Sohu (NASDAQ:SOHU), and Qihoo (NYSE:QIHU). In fact, it’s an extra strain on the whole internet sector in the country, with possible extra costs involved in the already weighty and arduous practice of removing dissent, as well as other genuinely illegal acts on the web.

It’s surely only a matter of time before one Chinese web company is held criminally responsible for content posted on its service. And what will happen then? A fine? The jailing of the relevant member of staff?

Using Xinhua’s presumably official version of events, the news agency summarizes this aspect of the new law:

Service providers are required to instantly stop the transmission of illegal information once it is spotted and take relevant measures, including removing the information and saving records, before reporting to supervisory authorities, the decision says.

It empowers supervising departments to take technical and other necessary measures to prevent, stop or punish those who infringe on online privacy, requiring relevant service providers to give support during investigations.

There are some positive aspects to all this, as it also puts into law measures that, Xinhua says, “will protect digital information that could be used to determine the identity of a user or that concerns a user’s privacy.”

But as with all new web controls in China, a country where the web is already massively locked down, many will worry that the tightened legal framework will be used to identify people who post online some ‘sensitive’ information, such as – to take a topical example – evidence of corruption among officials.

In practice, a lot of this is happening already, as with recent real name requirements for microblogs like Sina Weibo, or the long-standing need to show ID when buying a mobile SIM. For now, a lot of questions remain unanswered, such as how this affects wifi hotspots, or people who rent homes and whose broadband account will be in the name of the home-owner – and a lot of other issues and unknowns.

When you have a mobile voice assistant – like Apple’s Siri or Google Now – you don’t need to do anything so laborious as visit a search engine homepage and tap in some words. Chinese search engines don’t want to be left behind by this new tech, and so both Baidu (NASDAQ:BIDU) and Sogou this month launched their own Siri-like efforts.

The two apps – Baidu Voice Assistant and Sogou Voice Assistant – are for Android only, and allow smartphone owners to question and converse with the service in a natural, conversational way. The apps then offer up searches for anything from weather to songs, and get fast answers on things like calculations and friends’ phone numbers.

Baidu Voice Assistant launched yesterday, chasing a few weeks after the debut of the new app from Sohu-run (NASDAQ:SOHU) Sogou. Baidu is the top search engine in China, and Sogou is the third-largest with a more marginal 7.83 percent market share.

In terms of the UI, both apps look more like Google Now than Apple’s own creation, with the running theme of cards holding the information you’re looking for. By talking to the voice assistants and saying “Beijing weather,” this is what’s shown by Baidu (left) and Sogou (right):

Click to enlarge.

Then, asking for “Jay Chou songs,” the two search giants bring up a handy mini-player that’s connected to their own music-streaming services (again Baidu is on the left):

Click to enlarge.

On a lighter note, both of the new apps will tell you a joke if asked.

Other rivals in this Chinese voice assistant field include the specialist firm iFlyTek, in which China Mobile recently bought a 15 percent stake.

Check out these apps in Google Play: here’s Baidu’s, and this is Sogou’s.

[Source: Tech2IPO - article in Chinese]

Baidu (NASDAQ:BIDU) loves lists as much as the next human, so the leading Chinese search engine has compiled the top ten searches for hot news topics of the year.

The ten on the list [1] show that China’s web users were mostly concerned with old certainties (death and taxes), prosperity (like the price of silver), and official corruption. In fact, three of the ten topical terms on Baidu in 2012 are related to corruption. Indeed, there’s certainly enough grift and graft out there to fill hundreds of lists thousands of times over.

So, here’s the top ten for 2012:

1. The Wang Lijun controversy:
When one of Chongqing’s top cops, hand-picked by the Party Secretary of Chongqing, Bo Xilai, sought refuge in the US Consulate in the neighboring provincial capital of Chengdu, it was the start of the dramatic fall – bigger, perhaps, than Watergate – of Bo. The police chief was Wang Lijun, who is himself facing 15 years in jail for abuse of power and bribe-taking. It’s debatable if his defection is also being punished in that charge. As for Bo himself, see number three on this list.

2. The price of silver:
In tough economic times, the weighty stalwarts that are gold and silver make fine investments. But the price of silver was volatile throughout 2012, making it a trending search term throughout the year.

3. Bo Xilai is removed from posts:
In a tale that sounds more like some artsy modern-day restaging of Shakespeare’s Macbeth, Bo Xilai’s wife was ultimately convicted of the murder of British businessman and totally-not-a-secret-agent Neil Heywood, who, though a friend of the family – had threatened to expose outflows of corrupt money the Bo family were channeling out of China. Basically, blackmail. Shortly after his wife’s imprisonment for dispatching Heywood, Bo was out of his job – and the Party. It was a rare spectacle of political muck-raking in a culture that likes to avoid messiness and dissent. Check out the full timeline of the scandal on the BBC.

Time to put up the prices!

4. Gas prices:
As with motorists around the world, gas prices have been worrying China’s drivers all year. And see number seven on the list for another thing they have to fret about.

5. “Paper gold”:
These gold certificates are essentially savings accounts for gold. Coupled with silver, it’s a way for Chinese households to invest at a time of tightening house-buying rules and suspect stocks and shares.

6. Individual income tax:
In some good news for a change, the income tax exemption was raised this year from 2,000 RMB to 3,500 RMB (US$320 to $560) per month, saving a lot of low-paid workers from a tax bill.

7. Car license-plate lottery:
As if you don’t need to queue or wait for enough stuff in the country already, you can now add car license plates to the unobtanium list. So far this is just in two cities – Beijing and Guangzhou – but I wouldn’t bet against more areas being hit with this requirement in 2013.

8. Labor Contract Law:
This is an odd one, as this law was passed in 2007, but it’s still a crucial thing for both workers and employers to refer too.

9. Double Ninth Festival:
This ancient festival is still celebrated to this day, and is now a public holiday. It’s a popular day for picnics or a trip to the countryside. The festival is always on the ninth day of the ninth month of the lunar calendar.

The show-off. (Image: NBD.com.cn)

10. Official’s daughter-in-law shows off wealth:
Showing off online not only makes one look like a prize tit, but it can also lead to a massive backlash. That’s what happened when the daughter-in-law of a one official (a drug administration bureau chief) showed off her wealth online and revealed that her husband basically gets paid for going to work once a week at a local state-owned company. A corruption investigation was launched into her husband.

So, that’s the list. Well, the list of terms that Baidu was not ordered to remove and suppress by authorities. That’s how it goes.

[Source: Official ‘Baidu Beat’ blog]

Last year this Digital IQ report ranked three global companies as having “genius”-level marketing chops: Audi, Burberry, and BMW. This time around, four luxury brands get this accolade, led by cosmetics firm Estée Lauder (see the top ten table below).

So how is this calculated? To make the grade, brands need to do a lot of optimization, social outreach, and clever online marketing. For this report, the grading structure is 30 percent each for doing social media and localizing your site, and 20 percent each for digital marketing and mobile compatibility:

With all that factored in, here’s the top ten. Note that Audi once again appears as a “genius” brand when it comes to its online work in China:

As for the winner, the L2 Think Tank team notes that Estée Lauder has a web “presence on six social platforms [which] yields a social universe of more than 1.6 million fans.” Not the biggest number among these global companies, but the report states that its strategy is very social and well integrated.

Being social in China

Aside from things like search engine optimization for Baidu, luxury brands in China need to get themselves on the right social platforms. The report finds that social media adoption is up on every site, with Twitter-esque Sina Weibo still number one. A big winner this year is the video site Youku (NYSE:YOKU) where 60 percent of the analyzed brands in this report now have a social media presence:

That sure has been a long time building up, as we reported on brands like Cartier and Burberry opening brand video channels on Youku way back in the summer of 2011. Once again we see luxury automakers doing especially well, this time exploding their number of channel video views on Youku in 2012:

Of course, there are new platforms emerging, and brands need to be aware of reaching out via the messaging app WeChat (as we’ve seen Starbucks do so well this year), or on the Pinterest-like Meilishuo. Plus, the Baidu (NASDAQ:BIDU) owned video site iQiyi is aiming to challenge Youku for classy brand video channels, so that outlet needs to be considered as well.

Keeping the conversation flowing on Sina Weibo

Car makers again make a strong showing on China’s most important social service – Sina Weibo. Cadillac is top in terms of fans/followers on Weibo in this luxury segment, and fashion labels Dior and Coach are playing catch-up this year:

For more information about these brands and their strategies, catch the full report here. Plus, L2 has made a nice video overview that runs to three minutes:

(Mobile readers: Digital IQ Index®: China 2012 from L2 Think Tank, on Vimeo).

Dell recently announced that it’s quitting Android – but that leaves China’s Baidu (NASDAQ:BIDU) facing the prospect of losing its most high-profile smartphone partner for its own mobile OS.

The Dell Streak Pro D43 (pictured) running Baidu’s cloud-oriented, Android-based mobile OS [1] launched almost exactly a year ago as Baidu’s first-ever smartphone vehicle. At the time we described it as a major partnership that marks the Chinese search engine giant’s biggest move into mobile. But today, a Baidu representative declined to comment on whether Dell (NASDAQ:DELL) is still a hardware partner in the light of the US gadget-maker’s recent announcement.

Baidu also cannot reveal sales figures for its Baidu Cloud OS phones, so it’s hard to see how crucial Dell is to its mobile strategy, where it’s expecting three times more revenue this year. But from sources in China’s smartphone industry we hear that the other two hardware partners for Baidu Cloud phones, China’s Changhong and TCL, are actually generating a lot more sales for their budget handsets, as opposed to the more premium-priced Dell Streak Pro D43. If true, it would seem that a global brand-name is not such a crucial factor in smartphone sales in the country.

Dell had been targeting China for its Android phones in 2011, but it seemed the traction was never there, with consumers who bought high-end Android devices instead opting for large-screen Samsung or Huawei smartphones instead. But all is not lost, as Dell is still China’s third-most loved PC maker.

As for Baidu, it still has other smartphone market options outside of its Baidu Cloud OS, as seen with the launch earlier this month of the newest Lenovo LePhone, which even features some clever voice unlocking tech pioneered by Baidu.

Chinese search giant Baidu is apparently continuing its trend of working with other tech companies to produce its branded phones. After partnerships with Dell and Changhong, among others, Baidu has teamed up with Lenovo to announce the new LePhone A586. Priced at 999 RMB ($158) when purchased through Lenovo’s official site, the handset looks set to compete with the many other internet-company-branded phones that have flooded into the market over the last six months. Sales of the phone will begin on December 12.

The handset has been custom designed by Lenovo and features a high-performance Qualcomm chip. Its operating system is based on Baidu’s cloud platform, but apparently it’s not regular Baidu Yi; rather, it’s a custom OS built on Android 4.0 that has some cool new features like voice unlocks. It has a 4.5 inch touchscreen with 5 million pixels and comes with a built-in camera that can shoot HD video.

There are lots of cheap handsets out there, of course, but not many of them are running Android 4.0-based operating systems at present, so that may be a draw for some buyers. I also suspect that with Lenovo — a trusted hardware company — behind the helm, this phone will hold some appeal beyond people who just want to buy a branded phone from their favorite internet company. (Do those people actually exist? Lots of Chinese internet companies seem to think they do; I’m not convinced). Plus, at $150, it’s a lot cheaper than some of its strongest competitors, like the Xiaomi Mi2 at more than $300.

[via Sina Tech]

There are already a few ways to get into your Android device in a secure way: face recognition, a passcode, or a grid pattern. And now there’s one more smartphone safeguard – voice recognition. This was partly created by China’s Baidu (NASDAQ:BIDU), who call it “speaker verification” to create a “voiceprint,” and so far it can be found only in the Lenovo A586 phone (pictured) that launches today in China.

This voiceprint unlock feature was jointly created by Baidu and the Singapore-based A*STAR Institute for Infocomm Research, at their Baidu-I2R Research Centre (BIRC) that we saw established in the lion state in February of this year.

Click to enlarge.

‘Speaker verification’ sounds like a nice way to securely lock down your Android phone so that only you can get into it. I’ve tried face recognition on Android, but it comes with the issue of low light, and it doesn’t always spot who you are. Hopefully vocal identification will solve that, though it might be a pain on noisy city streets.

The Lenovo A586 is dubbed the LePhone A586 in China. Lenovo (HKG:0992) is performing very well with its Android-based smartphones in its native China, seeing sales up 44-fold in the year from Q1 2011 to Q1 2012. Indeed, domestic smartphone makers are trampling across the graves of feature phones with glee, and homegrown phone brands now account for 60 percent of China’s smartphone market.

Dr. Li Haizhou, co-director of BIRC, described this voiceprint roll-out as “a strong endorsement of user-inspired research and cutting-edge speech and language technology in I2R and BIRC.” I2R’s executive director, Dr. Tan Geok Leng, added:

Lenovo A586’s adoption of the Speaker Verification technology that is developed through our joint effort with Baidu demonstrates I2R’s commitment to translate their expertise in speech and language technologies into products that benefits consumers and the industry. It is indeed encouraging that an A*STAR-developed technology is being deployed in China, the largest and world’s fastest growing smartphone market.

Ever since anti-virus maker Qihoo (NYSE:QIHU) first caused waves with the launch of its own search engine this summer, the company has been expanding its offerings. Today it has rolled out a dedicated music search feature at music.so.com.

Though 360 Music search is a challenge to China’s biggest search engine, Baidu (NASDAQ:BIDU), with its Baidu Music service, Qihoo’s effort is actually just an aggregator of songs from third-party sites. Perhaps Qihoo plans its own music streaming service later. But for now, 360 Music links to smaller services such as Xiami and Yiting. So it’s a great traffic boost for those music startups.

In addition to the music section, Qihoo’s 360 Search also now has a streaming video section that aggregates movies and TV series from the likes of Youku, Tudou, and LeTV. Again, this is an area where Qihoo might develop its own in-house service in the future.

Qihoo’s founder and CEO is hoping that the fledgling search engine can take 15 to 20 percent of the search market in China. Currently, it has just under 10 percent, which is good going for a three-month old product. But it’ll be a challenge to grow it from there.

[Hat-tip to iMeigu (article in Chinese) for spotting this]

We have lots of things to be thankful for this week. If you had yourself a nice turkey dinner, you can be thankful for that. If you were Baidu this week and raised boatloads of money, you can probably be thankful for that too. And most of all, if your company is not RIM, you can certainly be thankful for that as well.

Here are some of our top stories from this week. You’re welcome.

Steven’s pick: Baidu Raises $1.5 Billion in Bonds Issue, Now Has a Fistful of Dollars for Overseas Acquisitions

China’s biggest search engine unveiled the full extent of its dollar bonds issue this week, which sees Baidu raising $1.5 billion in the public notes offering. With all those US dollars, there’s the strong likelihood that much of it will be used for growth in overseas markets. Baidu is active already in Vietnam, Thailand, Egypt, and Brazil – and that list looks set to grow. Here’s some speculation on what sectors it might look at.

Charlie’s pick: Toxic Roots: The Challenge of China’s Tech Expansion

We talk a lot about Chinese companies looking to expand overseas, but there are big obstacles for any company from China looking to do well abroad. This article should be required reading for anyone who talks about how China will one day dominate the global tech industry.

Willis’ pick: Why Aren’t Indonesian Devs Building More Games on Blackberry?

Enricko did a fascinating piece this week, interviewing local developers to find out what they thought about developing for BlackBerry. The sentiment doesn’t seem too positive, as developers are hesitant to build apps for the platform. You know you’re in trouble when developers’ confidence is shaken in this way.

Enricko’s pick: RIM Offers Free Calling Over Wifi

It’s good to see that RIM is trying to fight its way back up with free calling over wifi and the new Blackberry 10. But will buyers be able to patiently wait for new handsets with annual Christmas sales coming up?

Rick’s pick: Cookpad Invests in Japanese Social Finance Service ‘Zaim’

I’m going out on a limb here. But I really like this service a lot, and I think it has the potential to go places. It’s a dead simple application. It’s super useful, and it has a smart founder. And unlike many Japanese startups, it doesn’t have a crappy name. Stay tuned for the web version which should be coming soon.

With $1.5 billion now in its war-chest, will China’s Baidu (NASDAQ:BIDU) go on a buying spree in Southeast Asia? There were a few entrepreneurs who have emailed me to ask. Some were also curious to know which markets and products Baidu is interested in.

We redirected the questions to Baidu but didn’t get much additional information. But one thing’s for sure, the news did get some folks in Southeast Asia quite excited about a new challenger to Google. Here are a couple of possible products which Baidu might be looking at for its expansion over the next couple of years.

Search

For search, it is clear that Baidu is looking at Thailand and Vietnam, hence its Singapore-based R&D centre that’s focusing on getting these two languages right for semantic searches. In fact, some companies are also seeing the same opportunity to beat Google locally. Some of you might recall Wada, a recently launched, locally-made search engine looking to have a share of the Vietnamese market.

If there’s another country in the region under its search radar, I would bet on Indonesia. The market size and potential for internet growth over the coming years is just mouth-watering. To do search, the market has to be big enough to attract advertising dollars and has to speak primarily non-English languages to fight against Google. Vietnam, Thailand, and Indonesia certainly fit the bill. We know Baidu is active also in Japan, Brazil, and Egypt, but surely it has eyes on bringing selected products to more markets.

Travel and vertical search

Remember Baidu’s investment in Qunar.com? If Baidu is willing to spend hundreds of millions on travel, it is likely going to have the same appetite as it expands abroad. Qunar and its search engine go hand-in-hand. I’m not suggesting that Baidu has done anything nefarious to redirect competitors traffic to Qunar, but Qunar as a standalone service is a travel vertical search site. So anything that comes with search and recommended links would be within Baidu’s expertise. That said, vertical search areas such as price comparison, local food and deals, and digital content like music and books could be also on Baidu’s radar for expansion.

Mobile

Similarly, Baidu acquired Instagram-like photo app, PhotoSola, last year. They could do the same in Southeast Asia, but it’s unlikely as I don’t see a direct connection to its core business which is search and advertising. I get the feeling that Baidu won’t bring the same products to every market.

Baidu will watch the mobile space closely in Southeast Asia. At this year’s Baidu World event, the Chinese search giant focused primarily on mobile. So, any companies doing well in mobile could interest Baidu, and that may include area like maps, location-based stuff, voice and mobile search, and anti-virus. I believe Baidu also hopes that its mobile browser, which they put a lot of effort into in a recent relaunch, can gain some traction in Southeast Asia. Most importantly, Baidu probably will be looking for ways to monetize its mobile assets more efficiently.

Video

Baidu owns the majority of iQiyi, which is similar to America-based Hulu. Baidu may have interest in video sites in Southeast Asia too. There’s only one good one I can think of, and that’s Viki.com. There’s a possibility of bringing video content from Southeast Asia to China and vice versa though I don’t know how feasible would that be in legal terms.

Other products

There are so many possibilities – e-commerce, social, directories, ad platforms, and online forums – among areas that Baidu probably has an interest in (and already does in China or other markets). The Chinese search giant will probably observe each country and take the appropriate action when the time is right. It could also decide to just do things by themselves to fight against local products just like it did with Tieba and Hao123 in Vietnam and Thailand. It didn’t have a smooth time in Vietnam this past summer, and you can read more about that here. Be sure to check the comments too.

With all the hype about Southeast Asia, I’m pretty sure that this region won’t be the only target for Baidu. Hot areas like Brazil, the Middle East, and maybe even Africa are places where even more opportunities lie ahead.

China’s top search engine, Baidu (NASDAQ:BIDU), has raised $1.5 billion in its first-ever bonds issue. The dollar bonds are aimed at overseas investors, and will help the Chinese company acquire US currency for global acquisitions. Baidu hasn’t revealed any potential targets, but we’ve already seen the search engine giant make very careful moves into Thailand and Vietnam to take on Google.

Earlier this month, Baidu spokesperson Kaiser Kuo told the WSJ:

We want to grow our war chest for all sorts of operational purposes, including overseas [merger and acquisitions].

[UPDATED: Here's a quote directly from Baidu's afore-mentioned communications director]:

We’re pretty happy about how well the notes offer and how well it’s been received.

Besides the obvious advantage of being able to raise US dollars inexpensively at this time to retire some of our existing debt, our bond offer is really about having a ready war chest that gives us flexibility for a range of future strategic uses. That certainly could include [mergers and acquisitions] M&A. While we have no specific M&A deals pending at present, Baidu always wants to be ready to make prudent investments and acquisitions when good opportunities present themselves. Note that acquisitions of some Chinese companies would also require US dollars, so it can’t be assumed that proceeds from our raise that may be earmarked for M&A are necessarily for cross-border transactions.

In the announcement this morning, Baidu explains the notes offering (which will be listed in Singapore) in a bit more detail:

The public offering consists of US$750,000,000 of 2.250 percent notes due 2017 and US$750,000,000 of 3.500 percent notes due 2022. […] The Company expects to receive net proceeds from the offering of approximately US$1,491.6 million, after deducting underwriting discounts and commissions and estimated net offering expenses. The Company intends to use a portion of the net proceeds from the offering to retire certain existing debt and the remainder for general corporate purposes.

Baidu currently has 72.97 percent of the Chinese search engine market (in terms of page-views), but stronger local rivals such as Qihoo and Sogou, have been eating into its piece of the pie.

In a letter to employees last month, Baidu CEO and founder Robin Li urged the company as a whole to be more aggressively innovative and disruptive, and this major bonds issue – which gives Baidu a fistful of dollars – will help with that a great deal.

The Huawei G330D, running Android 4.0 and using Baidu search. (Image: cnmo.com)

China’s biggest search engine has buddied up with chip-maker Qualcomm (NASDAQ:QCOM) to offer extra free cloud storage to people who buy certain Android-based, Qualcomm-powered smartphones. It’ll see Baidu’s (NASDAQ:BIDU) new Dropbox-like service, called WangPan, offering those new phone-owners double the usual cloud storage space.

The deal covers phones sold in China that are powered by Qualcomm’s new Snapdragon 8×25 and 8x25Q chips. For people who don’t give a crap about what chips are inside their phones, it just means they’ll get more free cloud storage if they buy phones or tablets like the Huawei G330D/G330C (Ascend), Coolpad 7266, the K-touch W760, Hisense U950, or Lenovo S686. Not a hugely sexy list of hardware, but we noted last week that domestic brands now make up 60 percent of the China smartphone market – the top three are the afore-mentioned Lenovo, CoolPad, and Huawei – so this Baidu-Qualcomm deal has the potential to reach a lot of people.

How much extra storage is it worth? New phone buyers will get double the usual 15GB of Baidu Wangpan storage for free – a useful 30GB – for the duration of the phone’s lifespan.

Baidu spokesperson Kaiser Kuo explains that the Huawei Ascend model (pictured above) is particularly significant:

The Huawei G330D, which uses the Snapdragon MSM 8225 processor, is the first flagship dual-core device among the customized smartphone series issued by China Unicom.

Indeed, China Unicom – the second-largest telco in terms of 3G subscribers – is pushing that Huawei model hard these days, selling it for just 1,399 RMB (US$222). The tweaked Android 4.0 in that phone has had its Google search replaced with Baidu’s, as you can also spot in the photo up top.

As for the newer of those two Qualcomm chips, Baidu’s communications director adds: “The [Snapdragon] 8x25Q is a new processor announced only at the end of September, so there are no commercial devices yet.”

This partnership indicates also how seriously Qualcomm is taking the China market these days, where some experts reckon there could be as many as 500 million smartphones by the end of next year. A great many of those will be running Android, and will be low- to mid-range devices that cost less than $2,000 RMB ($319).

The reason not to, of course, is that unlike in China, Google isn’t blocked in Indonesia, and the company already has a big foothold in the market there. But let’s not forget that Baidu was winning Chinese search by market share even before Google left town. Chinese companies can beat Google at its own game by being more local, and I’m not just talking about the language (although that is obviously key). Baidu services often won out over Google’s for Chinese users even when both sites were accessible not only because Baidu’s search results were better in Chinese (in my opinion), but also because it offered other services catered specifically to the market at that time. A good example of this is its MP3 search feature which, while full of pirated music, was definitely something that users wanted, and something that Google just didn’t offer.

Chinese companies could do the same thing to Google in Indonesia if they’re willing to adapt their services to local tastes and partner with local companies to better access the market. And while Chinese internet companies have a pretty terrible track record when it comes to overseas expansions, the successful ones are the ones that adapt to local tastes while still maintaining their original flavor. (See, for example, WeChat).

Indonesia’s internet is growing fast, and with nearly 250 million citizens, that means there is a huge internet market that is still in the process of opening up. Foreign companies will be there regardless; but Chinese companies should be taking advantage of their geographical proximity to mobilize teams in Indonesia and gain a foothold for their services in that market. If, when the dust settles, Google remains at the reins of search in Indonesia, it will be in part because Baidu, Tencent, and other Chinese companies failed to commit themselves until it was too late.

The platform is everything in a new internet market, so ruling search is more or less ruling the internet. But there are other kinds of platforms that Chinese companies might be even wiser to establish. I’m pretty sure Tencent hopes to pump up users on WeChat and the QQ Mobile browser in Indonesia, and Baidu wants the same for its Baidu Mobile Browser. Once users are on these platforms, promoting other relevant internet products becomes relatively easy. Some people believe that Indonesia is the next China and if that’s the case, there’s no reason why Baidu, Tencent, or any other Chinese companies shouldn’t be keeping Indonesia on their expansion shortlists.

As you can see from the screenshot above, the web app is very slick and clean, and quite detailed. It lists dangers of all kinds, from gas and oil companies to radiation hazards to cemeteries, and it also helpfully lists hospitals. The danger map is laid over Baidu Maps, which means it’s pretty accurate, and I checked a couple addresses of places I have lived and visited both in cities and in the countryside, and found the results to be reliable and interesting (if also a little terrifying). The next time you move house in China, checking your new address on Danger Maps first is probably a good idea. (If you’re outside of China, you’re out of luck; the service only covers China at the moment).

As you may have guessed from the lack of advertisements, Danger Maps is a not-for-profit venture that was created by volunteers as a public service. The team behind it is called the IT Engineers for Environmental Protection Association and it has created similar products, like the ‘Share Photos of Pollution’ mobile app, before. Team member Tian Yu explained to me that like many of the other team members, his reason for creating Danger Maps was personal:

I myself am a victim of environmental pollution. [The place where I live] in Shanghai is right next to a landfill, and foul smells often emanate from it. In June of this year there was a mass protest over the building of an extension to the landfill for burning trash. I thought, if I had known about the environmental situation here when I was buying a house, perhaps my decision would have been more well informed and maybe I wouldn’t have bought the house at all.

Tian told me the locations listed in Danger Maps come not only from what’s already included in Baidu Maps, but also from public information on the websites of China’s environmental protection agency and city environmental management departments. The site has processed nearly 5,000 queries so far and the team is promoting it via weibo and other social media, but their ultimate goal is to create an open platform in cooperation with other environmental protection groups that would allow users to report and map environmental hazards and incidents (among other features). That project is currently in the planning stages.

Kompas cites Hary Tanoesoedibjo, the CEO of Indonesian media company MNC Group, as saying yesterday that the company is going to start building a search engine in 2013. Hary did not explain anything further other than that they will be cooperating with a foreign company for the search engine development, and that nothing has been finalized yet.

MNC Media Group is huge in Indonesia. CEO Hary Tanoesoedibjo is also acting as the president director of parent company Global Mediacom, which owns gigantic media presences including newspapers, TV channels, online media, and entertainment companies in the country. This is the same Global Mediacom that recently partnered up with China’s internet giant Tencent two weeks ago. And that makes Tencent, which also operates Chinese engine Soso, a worthy candidate to be this foreign company that Hary mentioned.

Soso.com has had some success in China and South Korea according to Alexa. It’s currently China’s fifth-largest search site. Of course, China’s leading search company is Baidu, which could be a possible contender for the spot as well.

Hary said, as reported by Kompas, that the reason he wants to build a search engine is because Indonesians are still using American search engines – especially Google [1]. This remark by him could be a hint to rule out other US engines, such as Yahoo or Bing, as MNC’s potential partner. Another reason is that both Tencent and Baidu are targeting Southeast Asia for expansion these days.

To date there hasn’t been any Indonesian search engine strong or bold enough to try to compete with the American giants. It’ll be very interesting to see if Hary and any potential partner will be able to make an impact.

[Original picture source: Kompas]

Be more wolf-like. That’s one of the rallying cries of Robin Li, CEO and founder of China’s top search engine, Baidu (NASDAQ:BIDU), in an internal email to all employees that was sent out today. The morale-boosting email was leaked out to Techweb, giving an interesting glimpse into one of China’s top web companies at a time when it’s facing new competition in its core business.

In the email, which was headlined “Change Starts With You and Me,” Robin Li (pictured right) calls on Baidu employees to think like wolves, to increase investment in innovation, and new businesses, and to be “willing to disrupt ourselves.” Outlining the dangers of stagnation faced by any large company, Robin suggests that his employees “must suffer” or else a level of comfort and achievement actually “becomes a disadvantage” – and then, he warns, they all risk becoming “dinosaurs.”

Innovation, innovation, innovation – and efficiency

There are several mentions of innovation in the letter, with Baidu’s CEO even suggesting that innovating should be a higher priority than net profit. To back that up, he says there’ll be more investment in some of its recent products, such as its desktop and mobile web browsers, so as to “guide users towards search” and thereby grow market share.

The ‘courage wolf’ meme was almost made for Robin Li’s email!

It’s clearly a call to arms in the face of competition from Qihoo’s new search engine, which has analysts worried and has caused a serious drop in Baidu shares since the new rival came online in mid-August this year. Baidu’s stock has since dropped from a summer peak of $133.98 per share to the current $106 – its second-lowest ebb of the year. In terms of search engine market share, Baidu is currently at 72.97 percent of search page-views, while Qihoo has blasted into second-place with 9.64 percent.

One of the subheaders in his lengthy email is “Reduce management layers and improve efficiency.” In this section, Mr. Li calls for “downsizing to improve efficiency” by “reducing the number of simple management” and “junior staff” and focusing more on senior engineers and others who are actively coding and creating products. Despite this suggestion of job cuts, no further details are given in Robin’s email to staffers. At the end of 2011, Baidu had just over 16,000 employees.

“Baidu’s second take-off”

Robin’s missive also outlines a few other details, such as fewer meetings and stricter action towards deadlines.

Baidu’s CEO concludes his email by calling for staffers to work towards “Baidu’s second take-off.”

In a recent speech at Stanford University, Robin Li outlined that mobile is an area where Baidu needs to grow, and the company is expecting three-times more revenue from mobile products this year.

[Source: Techweb - article in Chinese; Images: Luxuo, Knowyourmeme.com]

It seems clear in which direction Google Maps is heading in China. Down. New stats for Q3 2012 for mobile maps app market share in the country show Google Maps getting even more lost amidst strengthening local competition, losing nearly half its market share and slipping to sixth position – that’s down from second place in Q2.

The fall of the Google Maps app sees it leapfrogged this quarter by Baidu Maps, Mapbar, Tiger Maps, and Sogou Maps. Google now has, in this data from Analysys International, 9 percent share of the mobile mapping market in China, down from 17.5 percent in the previous quarter. This data covers all smartphone platforms, but not feature phone OSes such as Symbian S40. We put all that into a new pie chart for Q3 2012:

After earlier gradual drops, it’s not clear why the Google Maps app suddenly lost half of its share in just a few months. There might be no single reason. While Android is booming in China, various localized flavors of Google’s (NASDAQ:GOOG) mobile OS don’t come pre-installed with Google Maps, so Google’s mapping product doesn’t necessarily get to ride that wave of smartphone popularity here. Plus, the website version of Google Maps is partially blocked by the Great Firewall, which might give some consumers the idea that Google’s product is faulty or slow.

The other foreign competitior in this sector, Nokia’s (HEL:NOK1V; NYSE:NOK) Ovi Maps, had a bad quarter too, dropping from 7.3 to 5.1 percent share.

Autonavi is stagnant at the top, and Baidu’s oft-updated maps app is growing slowly but surely.

If you’re looking for Apple Maps that appeared recently in iOS6, it’s too early to figure in the chart for Q3 which runs from July to October. But clearly it has some very strong local competition to deal with, though Apple’s China maps might be boosted by being sourced from market leader Autonavi.

[Source: Eguan/Analysys International - article in Chinese]

iCarsclub

The team also has a hardware system in place, called iCarBox, which enables keyless entry. Car rentees will be able to unlock the cars using their smartphones and start driving. With this keyless entry system, it aims to enhance the rental experience. Taking full advantage of the benefits of mobile, it allows users to find a car within a small area very easily. Co-founder, Jamie Wang, explains:

Our driving box will be installed in the vehicle and integrated with the locking syste. [It will be able to] receive a lock/unlock signal from our central server to the driving box via SMS or GPRS. So when a user clicks the unlock button on his smartphone, our central server will send the unlock signal to the driving box, and the door will be opened. Then the driver can get into the car and find the ignition key in the compartment and start driving.

So how does iCarsclub monetize? In essence, it takes a fifteen percent cut from each transaction via its in-platform payment support. It also provides insurance coverage for all transactions.

Interestingly, whilst everyone else is looking to China for better opportunities, the team is comprised of four mainland Chinese, with qualifications and backgrounds hailing from China’s top Tsinghua University and Baidu. They have chosen to launch their product in Singapore first. Jamie elaborates:

Singapore is the best place to test our our idea because of the high demand on private cars, [coupled with] better trust between people and overall safeness, such as low theft and low accident rates. Once our idea is validated in Singapore and [we have figured the ideal execution method], we can easily replicate our business in other cities similar to Singapore.

The team is indeed looking to expand its operations to China after Singapore, targeting first-tiered cities such as Beijing and Shanghai. The service sounds similar in many ways to YongChe or America’s ZipCar. Co-founder Eddy Zhang tells us that iCarsclub is different because it gathers from both private and business car owners, which allows higher flexibility in car model types and at the same time lowers the rates.

For those who are keen to try out iCarsclub services, the team currently has discounts and offerings in place if you sign up with them via their site. You can visit them at iCarsClub.com.

Chinese web companies have a bad reputation for back-stabbing and skullduggery – but that might be about to change, at least for China’s search engines. The country’s top 12 search engines [1] yesterday signed a code of conduct that aims to stamp out acts of sabotage and unfair competition.

The agreement brought together representatives from 12 web companies in the search engine sector at the behest of a government-backed trade organization. Aside from creating the awkward photo below, it also brought together fierce rivals Baidu (NASDAQ:BIDU) and Qihoo (NYSE:QIHU), which have been locked in a tense stand-off after Qihoo launched its own search engine this summer. Indeed, the subsequent Baidu-Qihoo tussle shone a spotlight on some of the shadier shenanigans on the Chinese web, with suspicions of content-scraping and blocking rivals.

Click to enlarge.

The code of conduct focuses on the web spiders that crawl websites to index content. These things should no longer be used “to carry out acts of unfair competition,” says the WSJ translation of the agreement. And although the code is voluntary and not legally binding, the government involvement might make the companies – such as Baidu, Qihoo, Tencent, and Sohu – wary of upsetting authorities.

Web spider usage was a cause of concern just after Qihoo’s 360 Search was launched, with some accusing Qihoo of scraping Baidu’s search results to give its fledgling product a boost. But yesterday, Qihoo’s CFO, Alex Xu, denied the allegation and said his company only indexed Baidu content like its Wikipedia-esque ZhiDao BaiKe service, and did not in any way steal Baidu’s search results.

As with all government-backed pronouncements like this, we say, Good luck with that!

[Source: WSJ (paywalled); photo: QQ Tech]

15 to 20 percent; if we can get to this market share, then the monopoly will have been destroyed. And the monopolizer may be forced to make improvements.

Zhou calls the 15-20% market share a “rational” number for 360 Search to attain, but it seems like a pretty unambitious target for Zhou, who has been waging a war of words with half of China’s tech industry for the past few months. I mean, this is the guy who suggested that Tencent was scared of Qihoo creating a messenger product, the guy who has been saying that Baidu is hiring pundits to discredit his browser. Not that 15 percent is bad or anything, but when you’ve spent the last few months railing about smashing monopolies…well, I guess people expect something a little bit more dramatic.

Of course, if Qihoo really could grab a 20 percent share of the market, Baidu would still have a huge advantage but it might really be forced to reevaluate things a bit. But with 360 Search seemingly stalled around ten percent, it may face a real struggle in attempting to essentially double its current market share.

[Snowball Finance via Sina Tech, Image via Sina Tech]

It was only last summer that China entered the era of legal – and free – MP3 downloads, courtesy of web portals such as Baidu Music. But that heyday is already close to being over, with major sites like Baidu Music and Tencent’s (HKG:0700) QQ Music preparing to eliminate free downloads, to be replaced by monthly subscriptions.

Many Chinese sites that offer music will band together (in a rare show of unity) to implement these MP3 download subscriptions, starting at the beginning of next year. The anticipated cost will be in the range of 10 to 15 RMB (US$1.60 to $2.39) per month. Wang Hao, chief executive officer of music startup Xiami, tells the China Daily:

The era of the free lunch for China’s online music industry might be coming to an end.

Xiami, Baidu, Tencent, and many others will keep online music streaming free of charge, and the subscriptions will apply only to downloads of licensed music MP3s. It’ll bring the Chinese music industry more in line with its very mature online gaming sector, where virtual currencies, paid extras, and monthly packages have been in action for nearly a decade. Xiami’s Wang Hao adds:

Good music is not getting the attention it deserves, while online games are making profits, and forcing musicians to earn money through other channels.

This could put small music labels on a par with game developers – thereby giving them a much better chance of monetization.

But despite a move towards licensed music content on major web portals in China in the past year, music piracy remains rife nationwide – both online and offline. So the shift to a subscription model – as seen in other markets on Rdio, Spotify, Rhapsody, and many more services – does also risk losing grasp of consumers who’ll go towards the path of least resistance. And that, for Chinese consumers, will be getting MP3 downloads from P2P services, or ripping pirated CDs onto their PCs and smartphones.

[Source: China Daily]

MIIT has confirmed that it is indeed investigating the browser. Zhou also said that he felt the browser ought to be judged not by whether or not it’s sending information to servers but by what information it is sending, and whether or not users are aware of it, noting that there is a button users push to confirm they are aware data is being sent.

It will be interesting to see what MIIT says, but I would prefer Zhou had chosen a totally uninvolved third party. Presumably, there are people at MIIT who work with Qihoo and people there who work with Baidu (who Zhou seems to think is pulling the strings here despite a complete lack of evidence to support that idea), so a totally unconnected and uninvolved third party would have been better. We already know that the 360 Browser employs some evil tactics to keep users from switching, and a similar investigation of its safety claims by a similarly uninvolved third party might be just what the doctor ordered.

As for the lawsuit, given that Zhou accused Fang of being on Baidu’s payroll without any evidence to support that claim, I can’t imagine his lawsuit will be in the court system long before both Fang and Baidu file countersuits. It’s no secret I’m not Zhou’s biggest fan, and once again he has chosen to take the low road here. Even if he wins and neither party counter-sues, he’s not likely to be awarded more than a few thousand RMB; the lawsuits seem like nothing more than yet another publicity stunt. Ugh.

Zhou could learn something from the folks at Baidu, who haven’t said one word about this whole ugly mess since it began. Choosing not to dignify Zhou’s actions with a response is perfect; it makes Baidu look above it all while Zhou comes off as petty and paranoid. Moreover, I have to wonder how much shouting about how other people think 360 Browser is unsafe really helps Qihoo at all. Even if Fang’s claims are proved totally wrong, isn’t Zhou just helping to publicize them by continuing to go on about it?

[via Sina Tech]