As we're picking through the last scraps of the Google-China story for any more insights, we have a new wrinkle in the search story of the Middle Kingdom. As was pointed out last week, Google isn't the top dog in terms of search in China, and some suggested that its loud threat to depart the country was a humbled company, tail between its legs, quitting a market it couldn't conquer: Baidu holds the top spot in terms of search in China.
However, in the last 10 days, Baidu has seen both its chief technology and chief operations officers leave. COO Ye Peng left the company on 8 January, citing "personal reasons". The China Digital Times said that the People's Daily also cited "personal reasons" for CTO Li Yinan's departure and did not lay out his future plans. Blogger Uln at Chinayouren called the departure 'mysterious'. However, a comment on that post says that Li is taking over as CEO at a subsidiary of China Mobile, a move that was also reported by Xinhua, the official news agency of the People's Republic of China.
The departures come as Baidu's share of the Chinese search market is slipping as Google was gaining. BusinessWeek reports:
"Baidu had 58.6 percent of China's online search market in the fourth quarter, down from 63.9 percent in the previous three months, according to researcher Analysys International. Google's market share increased to 35.6 percent from 31.3 percent over the same period, the Beijing-based researcher said."
The Financial Times said that the departures from Baidu suggest "further disruptions ahead in China's Rmb7.5bn ($1.1bn) online search market". The company is the process of transitioning to a new search advertising platform called Phoenix Nest, similar to Google's AdWords. As with Yahoo's calamitous move to its new Panama advertising system in the US from 2003-2007. The transition has been cited as one of the reasons behind Baidu's falling market share.
Blogger Uln at Chinayouren says this could be a missed opportunity if Google does leave or is banned as a result of its confrontation with the Chinese government:
"Regarding the Google affair, if anything, this crisis in Baidu makes Google's move even more untimely, as they might have taken advantage of the situation now to catch up a bit on Baidu's market share."
