This week, Google (NSDQ: GOOG) officially launched Google Music, its most significant effort yet to eat into Baidu's dominance of the search market there, since so many searches on Baidu (NSDQ: BIDU) are for free music. Google Music promises to offer both higher-quality and legal downloads than Baidu, which links mostly to pirated copies.
But in a report on Baidu this morning, Bernstein Research Analyst Jeffrey Lindsay says, "This is a too-late gambit and (we) anticipate that Chinese users will continue to utilize the Baidu service that they are most familiar with." Lindsay expects Baidu's share of the overall Chinese online advertising market to continue to grow, reaching 37 percent in 2010. To back up his argument, he notes that even in the face of several recent scandals, including a government crackdown on pornography and the removal of unlicensed doctors and pharmacists from the search engine, Baidu's share of the Chinese search market is once again on the upswing, reaching 64 percent in February.
By Joseph Tartakoff