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Google China under fire for medical scam ads

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Beijing appears to be expanding its recent crackdown on search engines running medical scam ads to implicating Google China and Yahoo China.

Or it's possibly simply spreading the heat recently placed solely on Baidu, the country's top search engine.

A TV report by the top state-controlled channel, China Central Television, recently faulted Google and Yahoo for taking money from unlicensed medical companies for ads, the Financial Times reports.

The broadcast follows CCTV's criticism against Baidu in November, which ultimately forced the firm to ditch a large portion revenue. CCTV's earlier reports focused on Baidu's "pay-for-placement" ads on its search page, which blend the sponsored links with the natural results its algorithm spits out. Baidu was fingered by CCTV for not only carrying unlicensed medical websites in the ad program, but erasing websites from its results that refused to pay.

The revenue lost by dropping the ads was nothing to sneeze at. After Baidu agreed to stop the practice, the company lowered its fourth quarter 2008 revenue targets by about 14 per cent.

The latest CCTV report, aired on December 11, targets online ads that search engines display on the right-hand side of the screen, according to FT. It alleges ads for unlicensed medicines and treatments are illegal as well — which may or may not be true. The footage in the report appeared to be showcasing Google China's website.

Google told FT it took down the ads highlighted in the CCTV reports and has "strict mechanisms" to remove ads that violate Chinese laws.

If the latest media campaign once again forces the change — or if the government steps in with additional regulations – there could be big implications for search engines doing business in China. ®

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