Search in the Far East

To stay relevant or even solvent, a company must keep itself informed.

That’s why research, of both the in-house and outsourced varieties, is essential. At keeping tabs on who’s doing what in the marketplace is key to our success, and it doesn’t matter whether our information comes via mailman or email – at the end of the day, it’s still content, right? Recently, I happened to come upon the work of a reliable investment banking firm that specializes in Chinese tech research, New York Global Securities.

I learned that New York Global thinks as highly of search advertising’s positioning in China as I do of it was here in America. They initiated coverage of a major Chinese Search Engine, Baidu (which translates to “a hundred times”), with a “Buy” rating. Funny enough, and Baidu, the Chinese search giant, have something in common. But what, you ask? Baidu is based in mainland China (we’re not quite there, yet) and has little American presence. Yet, both companies, one small, one large, and on opposite sides of the earth, share a sentiment associated with search advertising – a sentiment shared by search advertisers all over the earth – namely, that there’s still brilliant opportunities in the field. As players in search advertising, no matter what the size or where we are, we must avail ourselves to these favorable conditions. We’re no GE, but we’ve got exclusive search technology surpassed by none, while Baidu, an indexer of 700 million pages, is located in a country that didn’t even have Internet access only 7-8 years ago. Incredible, sure, but these are hardly unique success stories in the field. One great aspect of search is that as it evolves, advertisers grow increasingly aware of its effectiveness. This makes the task of selling the revolutionary concept much less difficult, and industry forecasts indicate this advertiser confidence with predictions of continued search advertising growth through at least 2010. Advertisers simply can’t get enough of measurable, targeted end-users. According to Andrew Collier, New York Global’s analyst who’s recommending Baidu, the Chinese populace is even more receptive to Baidu’s relevant advertising than would be Westerners since existing Chinese advertising channels (that’s print, TV, and radio) are relatively weak.

So enticing is China’s advertising landscape for the accommodating platform of search, that Yahoo and, as of last January, Google, have launched Chinese versions of their popular search engines themselves. Baidu is sure to meet some stiff competition from Says New York Global’s Andrew Collier: “search is one of the best advertising models for the Chinese market because of its ability to target a specific customer base.

” Do no evil and do much business, right Google? In the meantime Baidu, with a 50% share of the Chinese search market, is reaching targeted customer bases within China. Search, by its flexible nature, adapts well to that frenzied economy. Massive ramp ups in Internet connectivity has been all the impetus needed. New York Global rates Baidu (BIDU) with a “buy” recommendation largely due to its positioning as a provider of this highly effective search advertising platform. The deep reach that search advertising provides Baidu in connecting with Chinese Internet users contrasts greatly with the Chinese Internet Portals whose total end user numbers are still too small to deliver mass goods to large audiences through banner ads and the like. So, too, is this a problem with traditional media, where government ownership is essentially a monopoly, thus preventing a healthy advertising environment. In China, Internet search marketing shines brightest in a sky of less than stellar advertising opportunities. Maybe I’m biased, but I believe it’s the best means here in America, too. Domestically, my company or yours might not have 50% of the search market, but, like any firm involved with search, we do have the same wind of opportunity blowing at our backs as Baidu. Jeff Conduct Director of Marketing ConductSearch.