Feeds

China 'orders Baidu cleanup'

When the music's over, turn out the lights

Secure remote control for conventional and virtual desktops

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. ®

Top 5 reasons to deploy VMware with Tegile

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Reducing the cost and complexity of web vulnerability management
How using vulnerability assessments to identify exploitable weaknesses and take corrective action can reduce the risk of hackers finding your site and attacking it.
Top 5 reasons to deploy VMware with Tegile
Data demand and the rise of virtualization is challenging IT teams to deliver storage performance, scalability and capacity that can keep up, while maximizing efficiency.