Language Selection

English French German Italian Portuguese Spanish

Baidu.com Ready for Stock Market Debut

Filed under
Web

Baidu.com takes its name from a 900-year-old poem but its ambitions are ultramodern - to become the Chinese-language equivalent of Internet search giant Google Inc. Little known abroad, 5-year-old Baidu.com says it already is the world's sixth most-visited Internet site, thanks to a strong following from China's 100 million-plus Web surfers.

Now the startup founded by two Chinese veterans of American tech firms is preparing to follow Google's example with an initial public offering in the United States, hoping to raise $45 million. A date for the offering has not been announced.

Baidu.com is in the front ranks of an emerging group of Chinese companies that are trying to create Internet services uniquely suited to their country's ideogram-based language and the political restrictions of its communist government.

"Here's a homegrown company that has created what really is a very strong search product," said David Wolf, managing director of Wolf Group Asia, a Beijing-based consulting firm.

Baidu.com was founded in 2000 by Robin Li, who earned a master's degree in computer science from the State University of New York at Buffalo and worked for U.S. search engine firm Infoseek, and Eric Xu, a Ph.D. from Texas A&M and a veteran of American biotech firms. Xu is no longer with Baidu.com.

The name - pronounced "by doo" - means "one hundred times." It comes from a Song dynasty poem and refers to a man ardently searching for his lover in a festival crowd.

It didn't take Google long to see the firm's potential. It bought 2.6 percent of Baidu.com last year in a move that outsiders thought might lead to the American search engine taking over the tiny Chinese startup. But Baidu.com has stayed independent.

Google's influence shows, though, in Baidu.com's spare white Web site that is nearly identical to its investor's.

By contrast, competitor 3721.com - bought in 2003 by U.S.-based Yahoo! - is a busier, colorful site with animated graphics.

Other early backers include U.S.-based venture capital firms with a reputation for spotting promising newcomers: Draper Fisher Jurvetson - Baidu.com's biggest shareholder, with a 28 percent stake - and the investment arm of International Data Group.

Baidu.com's IPO is modest beside the $1.2 billion that Google raised through its public offering last August. But its tentative price for the block of shares being offered values the whole Chinese company at $650 million.

The company says it is already making money - some $303,000 for the three months that ended on March 31.

China's communist government promotes Internet use for business and education. But it has also launched sweeping efforts to police online content, blocking access to material deemed subversive or pornographic.

The extent of the censorship controls has been highlighted by the changes that foreign companies make when they launch Chinese versions of commonly used services.

Free-speech activists criticized Microsoft Corp. when the blogging section of its recently launched China-based Web portal rejected such words as democracy, freedom and human rights, labeling them "forbidden language."

A search on Google's China-based service for such topics as Taiwan, the Dalai Lama or the banned spiritual group Falun Gong returns a message that says "site cannot be found."

And communist leaders, early believers in the Internet's economic promise, seem intent on keeping foreign involvement to a minimum in order to keep the profits for China's own firms.

Baidu.com's decision to stay independent could help it with intensely nationalistic Chinese regulators, eliminating any doubts about divided loyalties, said Wolf.

"It's a company that has grown up in the Chinese system. It's going to be a favorite of a lot of partners here and an implicit favorite of the government for that reason," he said.

Internet firms with foreign partners have been challenged by regulators who demand assurances that Chinese managers will stay in place and not surrender control to outsiders.

Baidu.com, 3721.com and other Chinese search engines also face daunting linguistic challenges that designers working in English and most other languages don't.

Chinese uses thousands of ideograms. On a computer, they usually are written by typing words phonetically in Roman letters, then using special software to convert them to characters.

Making things even more complex, the mainland's communist leaders simplified many characters after the 1949 revolution, while Taiwan, Hong Kong, Singapore and other societies use the old system.

So a search engine must sift through twice as many characters. And Chinese is written without spaces between words, making it hard for a machine to figure out where one ends and the next begins.

Then there are the quirks of a writing system with a vast literary history, 1 billion modern users and pressure to keep up with technology and international commerce. Baidu.com's advertising notes that Chinese has 38 ways to say "I."

Financial analysts forecast fast growth but brutal competition in the industry over the next few years, leaving only a handful of competitors.

Already, Baidu.com has been through a court battle with 3721.com after accusing its rival of adding elements to its software that blocked users from reaching the Baidu.com site.

A Beijing court ruled against 3721.com in April, ordering it stop such "unfair competition."

The lawsuit "did much to reinforce Baidu's underdog image," said Wolf. "That turned out to be very positive for them in China. It made people check them out."

By JOE McDONALD
Associated Press

More in Tux Machines

10 tips for easier collaboration between office suites

Yes, you are likely using the Microsoft formats for your documents. However, they don't always follow OpenDocument Format (ODF) standards. Instead of opting for the proprietary Microsoft formats, switch over to one that's welcomed by nearly all office suites: ODF. You'll find a much more seamless collaboration process and fewer gotchas when moving between office suites. The only platform that can have a bit of trouble with this format is Android. The one Android office suite that works well with ODF is OfficeSuite 7 Pro. Read more

Outsourcing your webapp maintenance to Debian

It turns out that I'm not the only one who thought about this approach, which has been named "debops". The same day that my talk was announced on the DebConf website, someone emailed me saying that he had instituted the exact same rules at his company, which operates a large Django-based web application in the US and Russia. It was pretty impressive to read about a real business coming to the same conclusions and using the same approach (i.e. system libraries, deployment packages) as Libravatar. Regardless of this though, I think there is a class of applications that are particularly well-suited for the approach we've just described. If a web application is not your full-time job and you want to minimize the amount of work required to keep it running, then it's a good investment to restrict your options and leverage the work of the Debian community to simplify your maintenance burden. The second criterion I would look at is framework maturity. Given the 2-3 year release cycle of stable distributions, this approach is more likely to work with a mature framework like Django. After all, you probably wouldn't compile Apache from source, but until recently building Node.js from source was the preferred option as it was changing so quickly. While it goes against conventional wisdom, relying on system libraries is a sustainable approach you should at least consider in your next project. After all, there is a real cost in bundling and keeping up with external dependencies. Read more

How Intel HD Graphics On Linux Compare To Open-Source AMD/NVIDIA Drivers With Steam On Linux

As earlier this week I did a 20-way AMD Radeon open-source comparison, looked at the most energy efficient Radeon GPUs for Linux gaming, and then yesterday provided a look at the fastest NVIDIA GPUs for open-source gaming with Nouveau, in this article is a culmination of all the open-source graphics tests this week while seeing how Intel Haswell HD Graphics fall into the mix against the open-source Radeon R600/RadeonSI and Nouveau NV50/NVC0 graphics drivers. Read more

Leftovers: Gaming