Feeds

China 'orders Baidu cleanup'

When the music's over, turn out the lights

High performance access to file storage

The balance of power in China's internet search market could soon change, as the government orders home grown music services to clean up their acts. But it could be worse news for Wall Street investors who have backed the Chinese giant without fully assessing the risks.

According to sources cited in the Wall Street Journal, the Ministry of Culture will require search engines to provide links only from licensed music sources. This is ominous news for Baidu, which owes its singular success in keeping Google at bay - Baidu enjoys a 70 per cent market share - to a controversial music scheme, which The Register described a year ago, here/.

Our investigation discovered how Baidu "deep links" to unlicensed MP3 files, more than half of which are on a network of closely-related domains, which are unreachable outside Baidu. Domains are rotated, ensuring the MP3s are always available. By effectively running a Pirate Bay beside its main search engine, Baidu has managed to keep Google in a distant second place.

Google objected that its own superior search product was shunned by a rival offering free sweets. So in March, Google launched its own licensed ad-supported music service in China to compete with Baidu. Any MoC cleanup would force Baidu to compete on level terms.

But why is this bad news for Wall Street? Because not-so-canny institutional investors have piled into Baidu, on the basis that it's "China's Google". Google is gigantic, goes the logic, so a Chinese Google has the potential to be humungous.

Here's a list of top investors, at time of writing:

Baidu investors

.

The source of Baidu's popularity isn't hard to see - nor is its vulnerability. A search rival offering a similar service to Baidu was busted last year. Without the traffic generated by music, Baidu will find commercial opportunities will be much more challenging.

You do wonder how these investment geniuses could overlook something so obvious to everyone else. ®

SANS - Survey on application security programs

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Record labels sue Pandora over vintage song royalties
Companies want payout on recordings made before 1972
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Number crunching suggests Yahoo! US is worth less than nothing
China and Japan holdings worth more than entire company
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
prev story

Whitepapers

SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.