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.
There are some obvious problems with this CCTV report.
First of all, there is a serious conflict of interest given that CCTV now runs a search website.
Second, CCTV seems to be suggesting that the entire business model of bidding for search keywords is illegitimate, as if somehow money shouldn’t be involved in online advertising. Everyone uses pretty much the same system nowadays; Baidu copied it from Google, with one addition to suit “Chinese characteristics”: the ability to move your results to the top of the actual search results instead of just the top of what are clearly advertisements.
Third, they try to make Baidu appear corrupt by mocking up counterfeit documents, but the guy catches them immediately and tells them they he can’t let them advertise until they fix their documentation. Why is this even in the show?
Finally, they try to make Baidu look like it’s defrauding its customers after the 铜门 guy’s 2,000 yuan is spent in less than 24 hours. If they’re suggesting that Baidu added search terms to his account to jack up his spending, well, I think I’d need more proof. If it’s widespread, I’m sure other people would be willing to come forward. But it just doesn’t make any sense. Why would Baidu want to piss off its own customers? It’s more likely the guy was hacked by his competitors or that he added them himself and wanted to complain afterwards.
The lady at the end talking conspiratorially about how prices per click have risen is also ridiculous. Prices in general have been going up for years as the economy grows. Why wouldn’t advertising costs go up as well?
In general, the whole thing is pretty sloppy. A poorly-executed hit job, if I’ve ever seen one.
Baidu does plenty of shady things already. There’s no need for CCTV to go and make more up.
Thanks guys for sharing news about that China’s CCTV Take A Shot At Baidu For Fraudulent Websites.
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