Baidu’s Search Methodology Controversy Gets Heated Up as CCTV Steps In. (Updated with Videos)

When the Sanlu scandal was first revealed two months ago, it was rumored that China’s search engine giant, accepted 3 million RMB from Sanlu to block out search results that consist negative images of the notorious milk company. Since then, has become a target of online criticisms. Recently, a sales plan leaked from the inside validifies the claim that does try to manipulate and censor search results for commercial purposes.  The company is now also facing an anti-monopoly lawsuit from Qmyyw.com, a website established by a Hebei medicine company.

Originally published in tianya, a post reveals two screenshots of a sales plan ppt that Baidu offers to some car company. The screenshots show that Baidu provides value-added services that offer PR protections such as deletion of negative news, blockout of search links, and manipulation of topics in Baidu tieba (Baidu Post Bar).

The original ppt can be founded here (part1) and here (part 2).

Also from StreetInsider.com,

Baidu.com (Nasdaq: BIDU) will face a 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 has now claimed that its “search results are not influenced by its bid ranking service”.

The “ranking bid” search methodology has long been controversial.  According to Jiefang Daily (in Chinese), the Hebei provincial government once offered 5600 RMB “bidding fee” to Baidu to put the government website on the top of the search results page that comes out the keyword “zhengfu wangzhan (government website).” However, because netizens then started to criticize the credibility of the government website, the deal was eventually cancelled. Ranking bids are very common in Chinese . As a result, the credibility of search results is highly challenged. According to Beijing Morning Post (in Chinese), a netizen complains that when she searches the keyword “Diabetes mellitus” in a Chinese search engine, two of the ten results on the first page link to websites selling fake drugs.

Online Marketing in China. SEO. also has this earlier detailed analysis of how baidu’s paid search program differs from Google’s.

1. The paid search and the organic results are not clearly divided. You will only notice the difference by the small gray underlined term next to the displayed URL. 推广 means it is paid search, 百度快照 means organic search result.

2. All paid search results will be placed before the organic search results. That means, if 20 customers buy the same keyword, the first organic search result will be found on page three. The price is based on a bidding process. Not only the CPC but quality factors like landing page evaluation will influence the position as well.

3. The ads in the right column are no CPC-based ads. They are fix-priced for one whole year. Position no. 1 to no.3 have the same price and rotate among each other. Position no. 4 to no.10 are cheaper than no.1 to no.3 and rotate as well. If the position is already booked, you have to reserve and wait respectively until it will become free. There is no possibility to get out of the contract before this one year ends.

4. Once a while you might notice one or two ads with a blue banner on position one and/or two. It looks similar to Google’s blue banner, but in fact it has a totally different meaning: if you search for a keyword and there are no paid results for that keyword because no advertiser has booked it, Baidu will display ads that are similar to the keyword you entered. Example: you enter ‘keyword advertising’ but there are no paid results, so baidu will show two ads for the keyword ‘advertising’ with a blue background.

The story is getting more interesting as CCTV just covered Baidu’s “ranking bid” methodology in its two recent “News 30 Minutes” programs.  In the first day’s program, CCTV covered how fake drug websites put their links on the top of corresponding Baidu search results pages through “bidding.”  In the second day’s program, CCTV’s reporter interviewed two selling representatives inside the company. A few points are worth mentioning.

1. The more a website wishes to pay, the higher its ranking will be shown on Baidu’s search results pages. A typical bid for the keyword “性病 (venereal disease)” is 16.56 RMB per click to put a fake drug website No.5 on the search results ranking list.

2. Baidu does not censor the credibility of its bidders seriously. A sales representative admits that in a case where a medicine company does not have a license for its drug product,  after the company photoshoped a fake license, its website then easily passed Baidu’s censorship.

3. Baidu blocks out those websites who decline to apply for the “ranking bid” service.  Qmyyw.com would be a typical example.

4. Baidu claims to cover 95% of Chinese netizens, and 80% of its revenue come from “ranking bids.”

Comments translated from the blog of 郭建龙 Guo Jianlong, the reporter who first started the whole investigation of Baidu’s “ranking bid” methodology:

Even though Baidu is being accused of the suspicion of monopoly, I still want to propose a question: which powerful state-owned corporation isn’t using its monopoly to exploit the living of our ordinary people?  However, our media’s circumstance is too bad; there is completely no freedom to say.  Who dares to say bad things about the government? Who dares to touch dragon’s squama?  Who dares to question those state-owned monopolies? You need to know that if you don’t handle your question well, you’ll be severely punished.  Caijing shibao (Financial Times) got shut down only because of one article on ABC. Just under such circumstance, media becomes to bully the weak and fear the strong. Since it does not dare to touch state-owned corporations, then it finds an easy target and puts all its criticisms toward Baidu. In fact, Baidu is far better then those corporations. Think about the time when China Mobile punished those service providers; who dares to fart? Take another recall that when the government proposed the 4 trillion stimulus, besides saying good, who dares to provide counterviews? With regard to anti-governmental monopolies, what our media basically do is: when the government leaves us a shit and says “eat it,” media then starts to discuss whether to fry it to eat or stir-fry it to eat; but noboday dares to discuss why and for what to eat.

From my point of view, Baidu is far better than CCTV. Therefore, after CCTV, such a dirty monopoly, also participates to attack Baidu, I decide to temporarly give up.  By the way, just to add one more ingredient, CCTV’s report actually uses the same cases I used in my early articles, especially that dirty hospital case. Are they not even willing to find a case by their own?

Who made Baidu’s blockout an advantage? In the first place when Google propagated to do no evil and refused to block out searches of prohibited keywords, the result was that Google got blocked out. Baidu said: “we submit; we, from the technological perspective, promise to not let what the government dislikes appear.” Then, it got favoured.  However, as the technology now becomes mature, if they can block out what the government dislikes, surely they can also block out what those other companies dislike. It is just that government at that time who fosters today’s controversy. Now, it shouts and says no to Baidu. It is like what is said in the Chengyu “the success or failure of the affair is all due to Xiao He” and just appears ridiculous to me.

Also, one interesting piece of humor translated from cnBeta:

the reporter: “the more I wish to pay, the higher my ranking will be?”

Baidu: “yes!”

the reporter: “I’m from CCTV!”

Baidu: “no problem, as long as you pay more than Hunantv does.”

(Hunantv, 湖南卫视, is a local satellite TV station in Hunan province, who has placed serious challenge to CCTV’s popularity in recent years.)

For more on China’s search engine market, please see the CDT tag “search engines.”

November 16, 2008 11:12 PM
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