China’s CCTV Take A Shot At Baidu For Fraudulent Websites

Last night, CCTV (China Central Television), the state-owned network, aired a program slashed at Baidu for its misconduct in showing fraudulent  websites in its search results and for puny effort in discerning genuine websites from fraudulent ones.

The Beijing-based TV station’s main arguments lies with the fact that Baidu allows fraudulent websites to be promoted on top of search results instead of the real ones as long as you pay enough to buy relevant keywords, from which Baidu churn out vast bulk of its revenue.

It’s not the first time Baidu facing such harsh public criticism from the national network. Back in 2008, a similar report by the TV station slashed more than 30% of its share price, leading to the revamp of its advertising system, later known as Phoenix Nest.

Some were speculating that, after Google’s retreat in 2010, Baidu has dominated the Chinese search market with a market share of over 80%, its market position is hard to rival. Now with the stealth launch of CCTV’s own search engine, the only way to compete with Baidu is resort to regulatory pressure.

In some level, makes sense. But if we look deep inside, we could conclude that the war between CCTV and Baidu, typifies a war between traditional media and new media.

CCTV always makes a fortune with its advertising business. Now with the rise of internet media, Baidu has replaced CCTV as the status quo “Media King” in terms of prospective advertising proceeds. The sharp report signifies the frantic roar of an aged traditional media.

This time, Baidu’s share fell nearly 4% in New York trading after the program was aired, not as harsh as last time.