Over the past week there has been much reported in the online blogs and media about Baidu.com promoting medical websites that are not holding legal Chinese licenses. Here is a release on the subject.

(Nasdaq: BIDU), the leading Chinese language Internet search provider, today issued this press release in response to recent CCTV reports.

The Chinese search engine has been providing customers with targeted marketing solutions via Baidu’s pay-for-performance (”P4P”) paid search platform which enables its customers to reach users who search for information related to their products or services.

Customers may use Baidu’s automated online tools to create text-based descriptions of their web pages and bid on keywords that trigger the display of their links and web page information.

China Central Television (”CCTV”), the largest state-owned television network in China, reported in its program “News in 30 Minutes” on November 15 and 16 that Baidu had been including websites of medical companies that do not hold proper licenses in its paid search listings for some popular medical terms, while excluding certain websites which did not buy keywords.

Shortly after the CCTV program was broadcast, Baidu initiated dialogue with CCTV regarding this matter. At the same time, Baidu removed paid search listings of certain customers, particularly medical and pharmaceutical customers without licenses on file with Baidu.

Baidu will allow these customers to resume access to Baidu’s P4P paid search platform once their relevant licenses are provided to and reviewed by Baidu. These customers account for approximately 10-15% of Baidu’s total revenues. Baidu believes this immediate measure is the most prudent way to protect the interests of Baidu’s users.

Currently, it is difficult to estimate how many removed customers will provide relevant licenses to Baidu and when they will do so. Baidu will work closely with customers to ensure those customers with proper licenses will be able to access Baidu’s services again quickly. While Baidu is currently uncertain about the near term financial impact of this prudent measure, Baidu does not believe it would have significant impact on Baidu’s results in the long term.

On November 17, 2008, Baidu issued a public statement in China, acknowledging that there could be cases where certain companies take advantage of Baidu’s paid search platform for questionable purposes. Baidu is committed to social responsibility and will continue to improve its sales and operational systems commensurate with its status as the leading Chinese language Internet search provider.

Separately, Baidu would like to affirm that Baidu has never excluded websites of any customers because they did not pay for keywords, and Baidu does not tolerate such practices.

Baidu is committed to playing a leading role in shaping the standards for China’s Internet industry. Baidu strives to further strengthen its operational systems and infrastructure. With a more mature operation, Baidu will grow even better able to serve increasing numbers of small and medium- sized enterprises (”SMEs”), the backbone of the Chinese economy.

After months of preparation and beta testing, Baidu has finally launched its instant messaging system, Baidu Hi.

This new IM product is still labeled beta 2. The interface is blueish and clean, and to use it you first need to have a Baidu passport (or use previous access details if one is using another Baidu service).

Baidu Hi is a newcomer in an industry currently dominated by QQ, and to a lesser extent, MSN. By leveraging in its enormous user base and reach, Baidu Hi should be able to grow quickly in the months to come although it should not pose a threat to the top two IM leaders in a foreseeable future.

Baidu Hi has a Baidu search bar at its top and its main objective is to improve user loyalty to the company’s core search business.

Baidu Hi is currently available in Chinese only.

Why is PPC in China so Important?

Baidu is the biggest search engine in China and they claim 62% of market share, with Google being the second. But, regarding SEM, they work a little bit different: Baidu’s keyword advertising placements are listed before the natural search results. All of those ads are called “推广”. So, professional service about keyword advertising is necessary for most companies. That’s why the selection of a local SEM agency who knows China target audience is almost a mandatory.

Tracking / Report

Keywords reports from Baidu’s stystem is actually very simple. Dislike Google’s adwords system, you cannot even track the performance / conversion of each keyword in Baidu. To ensure a high quality of our managed campaigns with Chinese keywords, Sinotech use sophisticated softwares so that we can provide our clients with reports which include more information, and keywords suggestions.