Feeds

China 'orders Baidu cleanup'

When the music's over, turn out the lights

Designing a Defense for Mobile Applications

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. ®

Using blade systems to cut costs and sharpen efficiencies

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Nadella: Apps must run on ALL WINDOWS – PCs, slabs and mobes
Phone egg, meet desktop chicken - your mother
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.