An analysis of the competitive status of Chinese Internet search market

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Baidu launched its own search homepage in September 2001, a year later than Google launched its Chinese search. Before, Baidu's main business for the portal to provide search technology services. Diverted independent search, Baidu paid the price is in April 2003 with the full end of Sina cooperation relationship.

In the reports of foreign media, Baidu is considered the most likely to be Google's acquisition of Chinese search engines, because from their point of view, whether Baidu launched an independent search homepage, or focus on the auction ranking business, everything is in imitation of Google, even in the final break with the big portal, the two are surprisingly similar.

The general consensus of the industry is that bidding rankings for Chinese enterprises, understand that there is still a certain degree of difficulty, the operation of the technical complexity is also higher. To the search engine Company, simultaneously provides the fixed and the competitive price rank service, has given the advertisement sponsor to diversify the service item choice, but also has dispersed the risk to some extent. However, Baidu currently abandoned the fixed ranking business, in the abandonment of the partnership with the big portal, the lack of technical services revenue, "put the eggs into a basket", the risk is not small.

In this fast-growing market, Li said, only "put the eggs in a basket" can be successful.

This mentality, with some of the taste of gambling, if it and the industry is generally concerned about Baidu overseas listing linked together, you can understand better. Copying Google in every way makes it easier for U.S. investors to understand Baidu's business, thereby amplifying Baidu's value with Google's power. If Baidu is not successful, Baidu will also be more likely to become a target for Google's acquisitions, as it does in all respects, says one step back.

Listed, has become Baidu this year's most important task. Because if Google, after the success of this year's IPO, quickly enter the Chinese development business, then Baidu's class Google in China will be greatly diluted, the possibility of listing will be reduced, even if it can be listed, there will be no Google entry in the case of high prices. These results will affect the financial strength. Without funds, there is no way to invest more in channels, technologies and branding. Without good technology and good brand, good channel search engine, will be doomed to be a second-rate player.

Therefore, Baidu listing must be selected in the six months after the Google listing, so the effect of Google listing can enlarge the value of Baidu.

Search Network

The search quickly formed a Chinese searching alliance, the industry called the Dark Horse. February 25, 2004, China Internet News Center, IDG Group Capital Injection, the establishment of joint ventures.

Search for the establishment of the Chinese Alliance, help to search the rapid increase in traffic. Searching for the search for the alliance to provide free search technology services, the return is the exclusive ownership of the flow of the right to operate. According to an investigation released last December by Eric, the traffic in the search was comparable to that of Baidu and 3721. Although this flow from others does not bring the actual "loyal users" to the search.

In particular, the search of the brand did not rise according to the surge in traffic. With only traffic but no brand recognition, it is not easy to sell a good price when the ranking service is made available to the advertising sponsor. Moreover, the search lacks the source of revenue to provide searching technology services to search alliances.

At present, one of the search technology services customers-Sohu, has announced plans to abandon the search technology services, replaced by their own search technology. And in search of another customer--3721, has completely replaced the Yahoo search technology, and abandoned the search technology services. The search market changes have come ahead of time when your brand has not been strong enough. If the search can not adjust the strategy in time, this change in the search can only be a disaster.

In addition, the Chinese Search Alliance, which relies on access to traffic, implies an uncertainty. In fact, search for the existence of the alliance, means that only rely on the construction of the profit distribution system to control the flow, but does not have the flow, can not have the flow will hinder the establishment of the brand. Once there is a change in the factors that make up this structure of interest, it may take a lot of time and effort to readjust the system. Thus, no matter how long the alliance is in existence, such a structure is a stopgap. From this point of view, the search is the weakest of three professional searching enterprises.

3721 with Yahoo China

3721 founder Zhou said it was a "technology change market" when talking about Yahoo's acquisition of 3721. The so-called technology, is Yahoo after the acquisition of Inktomi and Overture built enough to compete with Google's search technology. The so-called market, is more than 3,721 years of Operation established brand awareness, flow and huge distribution channels.

3721 has been operating in the industry for many years, its network real-name Plug-ins have covered 94% of the Address bar plug-in market share. In the lawsuit dispute with CNNIC, 37,211 directly emphasizes the bridge function of the real name of the network, trying to avoid the administrative authority of Chinese domain names into the cnnic. In a large market share leader, the network real name to 3721来, is a stable growth and the potential of a huge business. According to Zhou, at the time of the merger negotiations with Yahoo, 3721 of the book lies more than 10 million dollars in cash.

After the completion of the acquisition, 3721 is gradually put its original concept of network real name bait, injected more search content.

On the technical level, the database of the real name of the network compared to the search engine database, although the technical principle is basically similar, but in the technical complexity and index capacity is not at a level. But Yahoo offers 3721 technical elements to enter the search market. Yahoo bought 3721, the first is a fancy to its brand and traffic; second, the customer coverage of the rear end; the third is to see the business development stability of the real name of the network; The first two points will play an important role in supporting Yahoo's search service into China.

In this regard, 3721 of the competitive advantage is that in the network real name brand and customer coverage support, its business has achieved a healthy cash flow, coupled with the acquisition of funds for a period of inventory, 3721 in the expansion of other business, it can be said to be comfortable.

At present, 3721 has fully enabled Yahoo search technology, is now in a large-scale testing phase. But Yahoo China portal function is weak, 3721 of the search concept of light this fact, so that 3721 and Yahoo after integration to achieve 1+1〉2 effect, need to see the upcoming Yahoo China President Zhou My wisdom and creativity. In addition, Yahoo's search technology can win in the competitive Chinese search market, but also in its acquisition of Inktomi search technology in Chinese search index capacity of the size and quality.

Nor is there no risk in the search for the address bar, which is the start of the 3721. Address bar Search, on the one hand by the Address bar analysis of Microsoft factors and plug-ins constraints, on the other hand in the search market there is a search engine company's independent address search and toolbar search alternatives. At present, there have been cnnic and Sina, Baidu, etc. into the Address bar search field for competition.

Portal

such as Sohu door, do search the determination has been obvious. Such companies see the industry trend of Yahoo's acquisition of Overture and Inktomi. If you want to imitate, the difficulty is not small, because the search engine development to today, already has quite entered the barrier industry. Acquisition is the quickest way, but the first involves the acquisition of capital, the second is the difficulty of integration after the merger. Now that the engine companies are fully rolling out the supply chain, mergers and acquisitions are not only complementary but more overlapping. At least part of the money acquired is a waste of cost. To solve these problems, but also has a certain degree of difficulty.

Sina, after the end of its cooperation with Baidu, fully enabled Google to provide technology search services, which do not exclude such cooperation exclusivity. From the page search, Sina's online search does not show the words provided by Google, and Google only for Sina to provide a Chinese page search. If true, it means that Google's cooperation with Sina to achieve the goal of entering the Chinese market, on the other hand, there are reservations on cooperation, in case Sina through Google's search technology, traffic and brand further to make big. And Sina through its own portal influence, hope to attract to Google to provide technical services, to achieve the goal of a strong coalition, and Google did not enter China, Sina will not worry about similar Baidu brand diversion of its own traffic and related search income risk.

But it is only a matter of time before Google enters China, where Google is focused on listing in the US, and is powerless to exploit the Chinese market. But the situation is pressing, in Yahoo's Yst platform to transfer China's situation, Google will speed up the market after the completion of the pace of entry into China. Given that Google has considerable clout in the Chinese market in terms of branding and traffic, and that Google itself has a world-class search technology, the only obstacle to its rapid expansion will be a customer channel that needs to be built up over a long period of time.

So Google's entry into the Chinese market, the most appropriate way will be through mergers and acquisitions to obtain customer channels. As a result, the Chinese search market, who has a wide range of customer channels, effective, will become Google's potential takeover target. In this case, China's online search industry is facing another shuffle.