Baidu has announced that its C2C e-commerce platform
"YouA" is now home to 10 mln products and over 100,000
sellers, with an average of more than 100 products per
seller. The number of products for sale on the site is
increasing by several tens of thousands daily.
(SinaTech)
Tuesday, November 25, 2008
Monday, November 24, 2008
New racing game added
Baidu has partnered with Shanghai-based online game
company Radiance Software to add Radiance's webgame
"Go! Go! Racing" to its webgame platform
(wanba.baidu.com), reports Cnetnews.com. This is the first
racing game on Baidu's webgame platform.
company Radiance Software to add Radiance's webgame
"Go! Go! Racing" to its webgame platform
(wanba.baidu.com), reports Cnetnews.com. This is the first
racing game on Baidu's webgame platform.
Thursday, November 20, 2008
Phoenix nest - new ad system - to be rolled out
Robin Li, CEO, said today that Baidu will roll out a new
advertising system, "Phoenix Nest," designed to resolve
recent user problems and complaints regarding Baidu's
competitive ranking system. Baidu VP Shen Haoyu said
that the new beta advertising system will display paid
links and keywords on the right of the page, and will
suggest more flexible keywords to clients. Shen did not
divulge any specific details as to when the new system
would go online.
According to an industry insider who has seen the new
system, Phoenix Nest is comparable to Google's AdWords
in terms of functionality. It provides a number of new
functions including domain-targeted advertisements,
keyword recommendation services, budget planning tools,
lowest-price display, and round-robin advertisement
display functionality. Reporting information generated for
advertisers will include expanded information on statistics
across a number of indicators. A source at Baidu claims that
the new functionality in Phoenix Nest will help solve the
company's previous problems in providing sufficient data
to advertisers.
At the same time, Baidu COO Ye Peng said that the
employees shown to have been complicit in listing false
advertisements by CCTV would be dismissed.
advertising system, "Phoenix Nest," designed to resolve
recent user problems and complaints regarding Baidu's
competitive ranking system. Baidu VP Shen Haoyu said
that the new beta advertising system will display paid
links and keywords on the right of the page, and will
suggest more flexible keywords to clients. Shen did not
divulge any specific details as to when the new system
would go online.
According to an industry insider who has seen the new
system, Phoenix Nest is comparable to Google's AdWords
in terms of functionality. It provides a number of new
functions including domain-targeted advertisements,
keyword recommendation services, budget planning tools,
lowest-price display, and round-robin advertisement
display functionality. Reporting information generated for
advertisers will include expanded information on statistics
across a number of indicators. A source at Baidu claims that
the new functionality in Phoenix Nest will help solve the
company's previous problems in providing sufficient data
to advertisers.
At the same time, Baidu COO Ye Peng said that the
employees shown to have been complicit in listing false
advertisements by CCTV would be dismissed.
Analyst action: GS, CS, Needham, RBC
GS cuts price target from $260 to $225, still double
the current price. CS cuts target $184 to $138, but
raises rating from underperform to neutral. Needham
upgrades to buy. RBC reiterates outperform, but lowered
target from $347 to $242. Piper has a street-high target
of $465.
the current price. CS cuts target $184 to $138, but
raises rating from underperform to neutral. Needham
upgrades to buy. RBC reiterates outperform, but lowered
target from $347 to $242. Piper has a street-high target
of $465.
Wednesday, November 19, 2008
Baidu's press release
China Central Television (”CCTV”), the largest
state-owned television network in China, reported in
its program “News in 30 Minutes” on November 15
and 16 that Baidu had been including websites of
medical companies that do not hold proper licenses in
its paid search listings for some popular medical terms,
while excluding certain websites which did not buy keywords.
Shortly after the CCTV program was broadcast, Baidu
initiated dialogue with CCTV regarding this matter.
At the same time, Baidu removed paid search listings
of certain customers, particularly medical and
pharmaceutical customers without licenses on file with
Baidu. Baidu will allow these customers to resume access
to Baidu’s P4P paid search platform once their relevant
licenses are provided to and reviewed by Baidu. These
customers account for approximately 10-15% of Baidu’s
total revenues. Baidu believes this immediate measure
is the most prudent way to protect the interests of
Baidu’s users.
Currently, it is difficult to estimate how many removed
customers will provide relevant licenses to Baidu and
when they will do so. Baidu will work closely with
customers to ensure those customers with proper
licenses will be able to access Baidu’s services again
quickly. While Baidu is currently uncertain about the
near term financial impact of this prudent measure,
Baidu does not believe it would have significant impact
on Baidu’s results in the long term. On November 17, 2008,
Baidu issued a public statement in China, acknowledging
that there could be cases where certain companies take
advantage of Baidu’s paid search platform for
questionable purposes. Baidu is committed to social
responsibility and will continue to improve its sales and
operational systems commensurate with its status as
the leading Chinese language Internet search provider.
Separately, Baidu would like to affirm that Baidu has never
excluded websites of any customers because they did not
pay for keywords, and Baidu does not tolerate such practices.
state-owned television network in China, reported in
its program “News in 30 Minutes” on November 15
and 16 that Baidu had been including websites of
medical companies that do not hold proper licenses in
its paid search listings for some popular medical terms,
while excluding certain websites which did not buy keywords.
Shortly after the CCTV program was broadcast, Baidu
initiated dialogue with CCTV regarding this matter.
At the same time, Baidu removed paid search listings
of certain customers, particularly medical and
pharmaceutical customers without licenses on file with
Baidu. Baidu will allow these customers to resume access
to Baidu’s P4P paid search platform once their relevant
licenses are provided to and reviewed by Baidu. These
customers account for approximately 10-15% of Baidu’s
total revenues. Baidu believes this immediate measure
is the most prudent way to protect the interests of
Baidu’s users.
Currently, it is difficult to estimate how many removed
customers will provide relevant licenses to Baidu and
when they will do so. Baidu will work closely with
customers to ensure those customers with proper
licenses will be able to access Baidu’s services again
quickly. While Baidu is currently uncertain about the
near term financial impact of this prudent measure,
Baidu does not believe it would have significant impact
on Baidu’s results in the long term. On November 17, 2008,
Baidu issued a public statement in China, acknowledging
that there could be cases where certain companies take
advantage of Baidu’s paid search platform for
questionable purposes. Baidu is committed to social
responsibility and will continue to improve its sales and
operational systems commensurate with its status as
the leading Chinese language Internet search provider.
Separately, Baidu would like to affirm that Baidu has never
excluded websites of any customers because they did not
pay for keywords, and Baidu does not tolerate such practices.
Citi downgrades to sell
Jason Brueschke today cut his rating on Baidu to
Sell from Buy, slashing his price target to $110,
from $300. Brueschke today writes that he sees
four risks for the stock from here:
Consumer health categories are likely among the
most lucrative and thus “earnings could be impacted
even more than revenues.”
Other suspect categories may come under scrutiny,
including health and beauty products, lottery tickets
and fraudulent tax receipts.
Baidu’s reputation “has taken a big hit, and there is a
risk of a slowdown in query traffic growth.”
The company may have to change its search results
display to clearly separate paid and organic results,
“which could impact revenues further.”
Tuesday, November 18, 2008
Isobar partners with Baidu
Isobar, Aegis Media’s digital network, is seeking to grow
its search marketing facility in China with the launch of
its search engine optimisation service iProspect on the
mainland.
The initiative will incorporate Baidu’s application
programming interface (API) into Isobar’s global search
engine tool Iseba (iProspect search engine bidding agent).
The integration, which will be implemented by wwwins
Consulting, will reportedly enable campaign optimisation
across all search engines in China from a single online
platform. Anthony Yu, the firm’s search director, explained
that the service would employ an ‘intelligent’ system to
recognize online consumer behavior and make adjustments
accordingly within the parameters of a capped rate specified
by clients.
iProspect currently operates in a number of Asian markets,
including Hong Kong, Singapore, Thailand, Malaysia, Australia
and New Zealand in conjunction with Google and Yahoo.
wwwins’ clients in Greater China include adidas, Coca Cola,
P&G, Nissan and HSBC among others.
its search marketing facility in China with the launch of
its search engine optimisation service iProspect on the
mainland.
The initiative will incorporate Baidu’s application
programming interface (API) into Isobar’s global search
engine tool Iseba (iProspect search engine bidding agent).
The integration, which will be implemented by wwwins
Consulting, will reportedly enable campaign optimisation
across all search engines in China from a single online
platform. Anthony Yu, the firm’s search director, explained
that the service would employ an ‘intelligent’ system to
recognize online consumer behavior and make adjustments
accordingly within the parameters of a capped rate specified
by clients.
iProspect currently operates in a number of Asian markets,
including Hong Kong, Singapore, Thailand, Malaysia, Australia
and New Zealand in conjunction with Google and Yahoo.
wwwins’ clients in Greater China include adidas, Coca Cola,
P&G, Nissan and HSBC among others.
Suspended customers worth 10 to 15% of revenue
Baidu said Tuesday it has been in contact with CCTV and has
suspended customers worth about 10 percent to 15 percent
of the company's revenue. Unclear how many of these
can actually produce a licence to sell drugs. Long-term, the
company thinks there is no significant impact. Baidu is hosting
a conference call at 7:00 AM, Nov 19th, with analysts to
clarify the issue.
suspended customers worth about 10 percent to 15 percent
of the company's revenue. Unclear how many of these
can actually produce a licence to sell drugs. Long-term, the
company thinks there is no significant impact. Baidu is hosting
a conference call at 7:00 AM, Nov 19th, with analysts to
clarify the issue.
Monday, November 17, 2008
Analyst reaction: Sterne Agee positive
Sterne Agee & Leach analyst James Lee said Monday that
a report by CCTV over the weekend into medical malpractice
in China indicated some consumers may have found their way
to improperly licensed or unlicensed private clinics and health
centers via advertisements that came up when they searched
for health-related topics on Baidu. Baidu, which holds a
70 percent share of the search market in China, removed the
ads for medical practitioners that were considered questionable
over the weekend, Lee said. He sees the report as hurting Baidu's
reputation, but doesn't think it will be hurt financially as much
as Monday's share price decline seemed to indicate. Lee doesn't
think health-related ads make up that much of the company's
total advertising."The stock is obviously overreacting," he said.
a report by CCTV over the weekend into medical malpractice
in China indicated some consumers may have found their way
to improperly licensed or unlicensed private clinics and health
centers via advertisements that came up when they searched
for health-related topics on Baidu. Baidu, which holds a
70 percent share of the search market in China, removed the
ads for medical practitioners that were considered questionable
over the weekend, Lee said. He sees the report as hurting Baidu's
reputation, but doesn't think it will be hurt financially as much
as Monday's share price decline seemed to indicate. Lee doesn't
think health-related ads make up that much of the company's
total advertising."The stock is obviously overreacting," he said.
Analyst reaction: Piper Jaffray positive
In a client note, Piper Jaffray analyst Gene Munster said
the questionable ads on Baidu "were typically selling drugs;
we do not believe these are fake drugs per se, but were being
sold through non-accredited medical Web sites that should not
score as high on sponsored results."Munster said that Baidu
acknowledged in an online statement that this is true and that
it has to put more focus toward sales practices, not just its technology.
He thinks the company will see a financial impact, but believes it
will be "less than one would expect." Around 1 - 3%. Munster
leaves his "buy" rating, and price target of $468 unchanged.
Heavily bullish.
the questionable ads on Baidu "were typically selling drugs;
we do not believe these are fake drugs per se, but were being
sold through non-accredited medical Web sites that should not
score as high on sponsored results."Munster said that Baidu
acknowledged in an online statement that this is true and that
it has to put more focus toward sales practices, not just its technology.
He thinks the company will see a financial impact, but believes it
will be "less than one would expect." Around 1 - 3%. Munster
leaves his "buy" rating, and price target of $468 unchanged.
Heavily bullish.
Analyst reaction: Merrill Lynch negative
Merrill Lynch analyst Eddie Leung wrote to clients that
he expects "lower monetization on the pharmaceutical sector
and conservatively some extra impact on traffic and advertiser
growth." He lowered his 2009 revenue estimate by 17 percent
and his earnings-per-share estimate by 22 percent.
Analyst reaction: Morgan Stanley negative
This morning, Morgan Stanley’s Richard Ji noted that
China Central Television over the last two days called
China-based Internet search engine Baidu’s (BIDU) paid
listing practices “questionable,” in particular asserting that
“unauthorized and non-licensed medical web sites” had
captured the top listing positions ahead of legitimate web
sites, due to their willingness to pay higher prices for
popular keywords like “cancer” and “sexually transmitted
diseases.”
Ji notes that, according to the report, sites such
as tongnian.com, “a charity portal for youngsters,” are
“largely blocked from Baidu’s listings as they are unable to
afford keywords due to lack of financial resources.” Ji points
out that CCTV reports on several previous occasions have
meant big trouble for China-based public companies. In March,
he notes, Focus Media (FMCN) was the subject of a CCTV
program that singled out the company as a major source of
mobile phone spam; the company’s shares fell 35% within a
month. He also notes that Mengniu and Eli, two leader milk
producers in China, saw share prices drop 40%-60% after
CCTV reported their products were contaminated by melamine.
According to Ji, Baidu mixes its search results with sponsored
listings, “which may weaken search users’ experience.” He says
that, according to a survey by Sina.com, over 75% of a group of
5,900 users reported being confused by Baidu’s search results.
Ji notes that Baidu as of Friday was trading at a P/E in the
mid-30s based on 2008 forecasts, one of the highest multiples
among the China-based companies he follows.
China Central Television over the last two days called
China-based Internet search engine Baidu’s (BIDU) paid
listing practices “questionable,” in particular asserting that
“unauthorized and non-licensed medical web sites” had
captured the top listing positions ahead of legitimate web
sites, due to their willingness to pay higher prices for
popular keywords like “cancer” and “sexually transmitted
diseases.”
Ji notes that, according to the report, sites such
as tongnian.com, “a charity portal for youngsters,” are
“largely blocked from Baidu’s listings as they are unable to
afford keywords due to lack of financial resources.” Ji points
out that CCTV reports on several previous occasions have
meant big trouble for China-based public companies. In March,
he notes, Focus Media (FMCN) was the subject of a CCTV
program that singled out the company as a major source of
mobile phone spam; the company’s shares fell 35% within a
month. He also notes that Mengniu and Eli, two leader milk
producers in China, saw share prices drop 40%-60% after
CCTV reported their products were contaminated by melamine.
According to Ji, Baidu mixes its search results with sponsored
listings, “which may weaken search users’ experience.” He says
that, according to a survey by Sina.com, over 75% of a group of
5,900 users reported being confused by Baidu’s search results.
Ji notes that Baidu as of Friday was trading at a P/E in the
mid-30s based on 2008 forecasts, one of the highest multiples
among the China-based companies he follows.
CCTV segment
According to Morgan Stanley, CCTV, China Central
Television, called Baidu's paid listing practice questionable
given unauthorized non-licensed websites that are listed
ahead of legitimate websites and other websites that are
largely blocked because they don't have the financial
resources to afford keywords. The firm said
Focus Media (FMCN) was the subject of a similar incident
by CCTV in March, 2008, and shares went down 35% in
a month.
Television, called Baidu's paid listing practice questionable
given unauthorized non-licensed websites that are listed
ahead of legitimate websites and other websites that are
largely blocked because they don't have the financial
resources to afford keywords. The firm said
Focus Media (FMCN) was the subject of a similar incident
by CCTV in March, 2008, and shares went down 35% in
a month.
Sunday, November 16, 2008
MCSC music lawsuit settled
The Music Copyright Society of China (MCSC) and
Baidu have agreed to settle their copyright infringement
dispute out of court. Originally, the MCSC sued
Baidu in the Beijing Haidian District People's Court,
requesting RMB 1 mln in compensation for infringement
of its copyright on over 50 songs. The MCSC had held that
Baidu was violating its copyright by providing song lyrics
to web surfers. A spokesperson for Baidu claimed the
company was not infringing on copyright, and only using
Internet search and caching technology to provide a passive
search of music lyrics.
Baidu have agreed to settle their copyright infringement
dispute out of court. Originally, the MCSC sued
Baidu in the Beijing Haidian District People's Court,
requesting RMB 1 mln in compensation for infringement
of its copyright on over 50 songs. The MCSC had held that
Baidu was violating its copyright by providing song lyrics
to web surfers. A spokesperson for Baidu claimed the
company was not infringing on copyright, and only using
Internet search and caching technology to provide a passive
search of music lyrics.
Monday, November 10, 2008
Another, smaller, lawsuit against Baidu
An RMB174.4 million lawsuit for manipulating its search results
for medical information site www.qmyyw.com.
Qmyyw.com's suit claims that Baidu search results now
exclude Qmyyw.com's content following the company's reduction
in its payment for Baidu's bid ranking service. Citing reports from
the Southern Metropolis Weekly, the rumor points out that
Qmyyw.com purchased a number 3 spot on Baidu's site for
RM89,000 in March, but after the site lowered its payment in
July, its visits fell from over 88,000 hits to 18,340 hits in just a
month.
Baidu claims its "search results are not influenced
by its bid ranking service".
Many smaller lawsuits in China tend to be tit-for-tats between
competitors.
for medical information site www.qmyyw.com.
Qmyyw.com's suit claims that Baidu search results now
exclude Qmyyw.com's content following the company's reduction
in its payment for Baidu's bid ranking service. Citing reports from
the Southern Metropolis Weekly, the rumor points out that
Qmyyw.com purchased a number 3 spot on Baidu's site for
RM89,000 in March, but after the site lowered its payment in
July, its visits fell from over 88,000 hits to 18,340 hits in just a
month.
Baidu claims its "search results are not influenced
by its bid ranking service".
Many smaller lawsuits in China tend to be tit-for-tats between
competitors.
Wednesday, November 5, 2008
B2B platform to be free
Baidu's (Nasdaq: BIDU) rumored business-to-business
e-commerce platform is expected to offer free services,
reports Beijing Business Today quoting an unnamed insider.
The company is calling the platform "Shang Dao" or
"The Way to Do Business," said the insider. Previous
reports said Baidu had appointed former Tootoo.com,
Ninetowns' B2B subsidiary, COO Hu Xinran as enterprise
marketing department manager and commenced initial
work on a platform similar to Alibaba.com (1688.HK).
e-commerce platform is expected to offer free services,
reports Beijing Business Today quoting an unnamed insider.
The company is calling the platform "Shang Dao" or
"The Way to Do Business," said the insider. Previous
reports said Baidu had appointed former Tootoo.com,
Ninetowns' B2B subsidiary, COO Hu Xinran as enterprise
marketing department manager and commenced initial
work on a platform similar to Alibaba.com (1688.HK).
Tuesday, November 4, 2008
Baidu joins wireless city projects
Baidu announced yesterday the company has finished
construction of the Shanghai Jiading Wireless City
Internet portal, and will officially launch the site
shortly. This portal will provide Wireless City users
with search, community, and e-government applications
and services.
Similar projects are currently underway in Shenzhen,
Beijing, Dongguan, and Changde, and plans call for
similar projects to spread to 25 large and mid-sized
cities in China by the end of 2008. Baidu will participate
in the development and promotion of applications and
services for all of these Wireless City networks.
construction of the Shanghai Jiading Wireless City
Internet portal, and will officially launch the site
shortly. This portal will provide Wireless City users
with search, community, and e-government applications
and services.
Similar projects are currently underway in Shenzhen,
Beijing, Dongguan, and Changde, and plans call for
similar projects to spread to 25 large and mid-sized
cities in China by the end of 2008. Baidu will participate
in the development and promotion of applications and
services for all of these Wireless City networks.
Monday, November 3, 2008
B2B plans
Baidu has appointed former Ninetowns' (Nasdaq: NINE)
business-to-business (B2B) e-commerce subsidiary
Tootoo.com COO Hu Xinran as enterprise marketing
department manager, reports Sohu citing Baidu and
Tootoo sources. Hu left his role as chief operating
officer in July, said a Tootoo.com executive.
Baidu plans to release a B2B platform similar to that
of Alibaba.com Ltd (1688.HK) and, according to an
unnamed source, has contacted certification
companies about creating a seller identity verification
system, reports Beijing Business Today. The search
giant has also commissioned third-party companies
to conduct face-to-face surveys with clients of
Alibaba.com's paid Gold Supplier B2B service, said
a Pearl River Delta distributor for Baidu's bid
ranking service. Baidu launched the open beta version
of its consumer-to-consumer e-commerce platform
Youa.com on October 28.
business-to-business (B2B) e-commerce subsidiary
Tootoo.com COO Hu Xinran as enterprise marketing
department manager, reports Sohu citing Baidu and
Tootoo sources. Hu left his role as chief operating
officer in July, said a Tootoo.com executive.
Baidu plans to release a B2B platform similar to that
of Alibaba.com Ltd (1688.HK) and, according to an
unnamed source, has contacted certification
companies about creating a seller identity verification
system, reports Beijing Business Today. The search
giant has also commissioned third-party companies
to conduct face-to-face surveys with clients of
Alibaba.com's paid Gold Supplier B2B service, said
a Pearl River Delta distributor for Baidu's bid
ranking service. Baidu launched the open beta version
of its consumer-to-consumer e-commerce platform
Youa.com on October 28.
Share buyback plan for $200 million
by end 2009. At the current market cap, that
reduces P/E by about 3%.
reduces P/E by about 3%.
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