Friday, January 15, 2010
If Google does pull out of China, it will yield its 36% market share to rival Baidu, a Chinese Internet portal and search service that’s not as “home grown” as Beijing claims. Baidu got to where it is today, controlling 58% of the Chinese Net search world, thanks to investments from American banks and venture capitalists.
U.S.-based venture capital firms Draper Fisher Jurvetson and IDG Technology Venture helped provide seed money for Baidu, and its initial public offering (IPO) was made possible by Goldman Sachs, Piper Jaffray, and Credit Suisse First Boston. According to the First Amendment Coalition, Fidelity and Morgan Stanley currently own shares of Baidu.
While Google’s possible withdrawal from China would spell good news for Baidu and its investors, Wall Street could still lose out on the Chinese search engine company. That’s because the Ministry of Culture has reportedly ordered all search engines to begin linking only to licensed music sources. Until now, Baidu has helped Chinese citizens download pirated MP3 files through a scheme of “deep links,” according to the online tech publication, The Register. A government crackdown on unlicensed downloading could weaken Baidu’s popularity.
-Noel Brinkerhoff
More Power to Google for Its Civil Disobedience in China. Why Does US-Backed Rival Baidu.Com Get a Free Ride? (by Peter Scheer, First Amendment Coalition)
China 'Orders Baidu Cleanup' (by Andrew Orlowski, The Register)
Goldman Sachs & Baidu - The Untold Story (ZeroHedge.com)
Baidu FAQ [note #8]
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