TIME on Baidu's Adjustment To Google-Free World

TIME Magazine's veteran business correspondent Bill Powell provides a definitive look at Baidu.com, the Google of China, which has become even more the default search engine there since Google decided to stand up to Chinese censorship of its search results.

There is a major business story there - basically what life would be like for News Corp. if CNN suddenly went out of business.

The company already collects 64% of the revenue generated by search engines in China via advertising, according to Analysys International, a market-research firm, and claims 76% of overall search traffic. The comparable figures for Google are 31% and 20%. If Google soon shuts down its Chinese search engine (Google.cn) — as most analysts believe it will — Baidu will grab even more. Dick Wei, senior analyst at JPMorgan Securities in Hong Kong, estimates that if Google loses a quarter of its China traffic, Baidu will reap a 6% gain in revenue; the gain would be 12% if the number of eyeballs logging onto Google shrinks 50%.

Powell goes further than the obvious to write a history of Baidu founder Robin Li, how he built the site that was beating Google already and more broadly about Chinese business culture.

In 2008, CCTV, the powerful state-run television network, aired reports on the site's habit of serving up unlicensed doctors and illegal pharmacies in response to medical queries on its engine. It turned out those were Baidu advertisers. The disclosures hit directly at the site's integrity and temporarily crushed the stock.

With economy of words and using the Google/China news point as an excuse to explore the business rivalry more deeply, Powell has produced a great work of magazine journalism.