Chinese search engine Baidu worked an image of presidential candidate Barack Obama into their home page logo today, as well as a tribute page about the candidate.

From what we can tell it’s very rare for Baidu to dedicate its home page to an individual, and no other U.S. presidential candidate has been so honored. In short, this is an endorsement of the candidate.

Given the tepid relations between the two countries and general U.S. mistrust of China in general, I suspect that the Obama campaign won’t be reaching out to press to let everyone know about the endorsement.

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The major record labels have gone in for a second round of listing pirated songs is bad legal action against leading Chinese search engine Baidu and smaller player Sohu.

Universal Music, Sony BMG, Warner Music and Hong Kong-based Gold Label Entertainment lodged the new suit Monday, asking a Beijing court to order Baidu and Sohu to remove links to thousands of sites that carry pirated music.

A previous case against Baidu was unsuccessful, however the record companies believe recent changes to Chinese copyright law gives them a much stronger case this time. Yahoo China has been found guilty of copyright infringement under the new laws.

The success of Baidu has been credited to its index of music which is available from its front page, something Google has been unable to compete with until now (Google does not offer music search in China). Word leaked earlier today that Google had entered a joint venture with Top100.cn to offer free and legal music in China (details here) later this month.

The NASDAQ listed Baidu remains China’s largest internet company, but the site has been hit harder than many since the sharemarket turned late last year. From a high of $407.70 in November 2007, the stock closed at $230 a share today, down by a whopping 43.6%. Baidu shares fell 2.17% to $225 a share in after market trading.

(via WSJ)

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Google is set to challenge China’s largest search provider Baidu by offering free legal music.

The success of Baidu has long been credited to the search engine providing music search from its front page, but much to the lack of amusement of record companies, the music found by Baidu is nearly all pirated. Baidu fronted a Chinese Court in December, and won the day with a ruling that Baidu did not infringe copyright by merely linking to infringing music.

According to a WSJ.com report, Google’s new free music service in China is in the late planning stages and involves a joint venture with an undisclosed company. The service will offer access to music from three of the four big global music companies, as well as other smaller players, with a launch date possibly later this month.

The move into music provision would be a first for Google, and although this deal is directly in response to Baidu, there is always the possibility that with one territory in place, complete with joint venture partner and music deals, that Google could roll this out into other countries in the future. Yahoo was rumored to be considering a similar service in January, although has since closed its music service in favor of RealNetwork’s Rhapsody service. There are also a number of small players offering ad supported music as well. Either way, it’s yet another vertical where the smaller players/ startups will sleep less well at the thought that Google may enter their space in the future.

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While Google dominates the top slot in search both in the U.S. and worldwide, with a global search market share of 62 percent, there is still a lot of elbowing going on below, especially when you look beyond the U.S.

In a comScore ranking of the top-10 global search engines as measured by number of searches during the month of December, 2007, Yahoo comes in at a distant No. 2 with only 13 percent of global share. (Although, in the U.S., Yahoo actually gained a half-point of share in December, whereas Google dipped 0.2 percent). The big surprise, though, is the strength of local search engines in countries that don’t use the Roman alphabet. No. 3 on the list is not Microsoft, but Chinese search engine Baidu (with 5 percent share, versus Microsoft’s 3 percent). No. 5 is Korea’s NHN Corporation, which operates the Naver portal and search engine. Creeping up on Ask’s No. 8 spot, is Russian search engine Yandex. And Alibaba (which may include Yahoo China) brings up the rear at No. 10.

Shouldn’t the best search technology win no matter what the language? These market share figures suggest that culture and marketing play a big role as well—unless, of course, you are Google.

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Chinese search giant Baidu has lost its CFO under mysterious circumstances, but has won a major piracy case.

In a statement, Baidu said that CFO Shawn Wang had died in “an accident” whilst on holidays in China. No further details on the death were provided. Baidu shares dropped $9.07 following the news.

On a more positive note a Beijing appeals court ruled that Baidu was not guilty of copyright infringement for posting links to websites that offer illegal music downloads. Baidu offers music search on its front page and the service is often cited as being one of the core reasons behind its success in China over Google, who does not offer a similar music search facility. Yahoo China lost a similar case December 21.

(via AFP/ NY Times)

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Google is being investigated for tax evasion by the Chinese Inland Revenue Department following a tip off from an “informant” alleging wrong doing.

According to local reports, the investigation into Google includes evasion of business and personal tax, and tax on employee options.

At least some of the investigation relates to how Google has previously treated transactions from Chinese customers to its US head office. Between 2000 and 2003 Google offered Adwords services to Chinese citizens that did no go via the local subsidiary, resulting in no local records from which authorities can check for tax avoidance. A further allegation suggests that domestic customers until 2007 could use agents to place Adwords ads, avoiding a formal invoice and auditable paper trail, possibly in breach of Chinese tax law.

Sina.com (in Chinese) received some sort of confirmation from the Chinese tax authorities that the investigation was underway, and went on to say that the investigation could widen to include other online companies operating in China, including Taobao, Baidu and Yahoo.

Thanks to Billsdue for the tip

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Google is testing a new home page for Google.cn that completely abandons Google’s clean uncluttered look for something that looks more like Yahoo.

Google Blogscoped notes that this may just be a test and might not become the main Google portal in the worlds second largest internet market, but even as a test it’s a big change. Google has struggled to gain marketshare in China against the homegrown but NASDAQ listed Baidu.

If you’re wondering what all the content in the shot above means, a translated version can be found here.

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The IPO of Alibaba.com hit the Hong Stock Stock Exchange Tuesday (local time) with a big increase over its initial offering price.

Alibaba.com is a spinoff from the Alibaba Group, the company that owns Alipay, Taobao.com and Yahoo China and is 40% owned by Yahoo.

Applications for shares in the IPO were 256x the amount of stock available, 858.9 million shares or 17% of the company. The IPO price was HK$13.50 ($1.74) per share.

As of 12:30pm local time (+8 GMT) Alibaba.com shares were trading at HK$35.75 ($4.60), an increase of 164% on the list price.

Yahoo is a big winner from the IPO, having obtained a 8.2% stake pre-IPO that went from a paper value of $720.89 million to $1.9 billion based on the 12:30pm price.

Alibaba now has a market cap of a rather staggering $23.24 billion, significantly more than the market cap of China’s biggest search engine, the NASDAQ listed Baidu on $14.05 billion.

See our previous coverage here and here.

Alibaba

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The IPO of Alibaba.com hit the Hong Kong Stock Exchange Tuesday (local time) with a big increase over its initial offering price.

Alibaba.com is a spinoff from the Alibaba Group, the company that owns Alipay, Taobao.com and Yahoo China and is 40% owned by Yahoo.

Applications for shares in the IPO were 256x the amount of stock available, 858.9 million shares or 17% of the company. The IPO price was HK$13.50 ($1.74) per share.

As of 12:30pm local time (+8 GMT) Alibaba.com shares were trading at HK$35.75 ($4.60), an increase of 164% on the list price.

Yahoo is a big winner from the IPO, having obtained a 8.2% stake pre-IPO that went from a paper value of $720.89 million to $1.9 billion based on the 12:30pm price.

Alibaba now has a market cap of a rather staggering $23.24 billion, significantly more than the market cap of China’s biggest search engine, the NASDAQ listed Baidu on $14.05 billion.

See our previous coverage here and here.

Update: Alibaba.com stock is now trading at HK$39.60 as at 3:40pm local time (2:40am EST). We’ll update again once the days trading closes in Hong Kong

Update 2: at the close of trade Alibaba.com stock was HK$39.50 ($5.09). Market cap is now $25.17 billion.

Alibaba

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Further to our earlier story on visitors to Google Blogsearch being redirected to Baidu in China, new reports have surfaced that would indicate that China has unilaterally blocked all three major search engines in China and is redirecting all requests to Baidu.

Digital Marketing Blog posts that all requests to Yahoo.com and sub-sites are being redirected to Baidu. Google Blogscoped forums indicate that Live.com is also being re-directed to Baidu, as well as confirming the Yahoo story and our earlier Google post. The re-direct would also appear to apply to YouTube.com.

There is some suggestion that the news of the Dalai Lama being awarded a prize by US President George W Bush may be behind the move, but this is unable to be confirmed.

I’ve written previously on the possibility that China may use its firewall as an economic tool as opposed to a censorship tool alone, and although censorship may be partially behind todays blanket ban of US search sites, the redirect to Baidu would indicate an economic motive; if the Chinese Government were serious about censorship alone we would have reports of page not found/ blocked messages, not redirects to Baidu. The Chinese Government is clearly using its censorship regime to the economic benefit of a Chinese owned (but NASDAQ listed) company. Although the United States Government is a poor WTO member (Antigua anyone) given that China is a recent member the US Government should lodge a complaint with the WTO. China expects free and open access to Western nations but is now not only blocking, but  also redirecting domestic traffic away from Western internet sites that compete with local firms.

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