Baidu Flounders Abroad, Wastes Time With Microsoft Tie-Up 百度海外拓展与微软合作纯属浪费时间

By newsdoug on July 5, 2011

Baidu searches for success Baidu (Nasdaq: BIDU) is once again showing the world its ineptitude outside its core online search business, reporting massive losses on overseas initiatives and announcing a new tie-up with Microsoft (Nasdaq: MSFT) that also looks like little more than talk. Chinese media, citing one of Baidu’s latest SEC filings, are reporting the Chinese search leader has lost a hefty 700 million yuan, or more than $100 million, on its overseas initiatives in the last three years, mostly from its Japan search initiative that isn’t going anywhere fast. (Chinese article) Also disconcerting is the fact that the losses have grown over each of the last 3 years, from about 200 milliion yuan in 2008 to 260 million yuan last year. I don’t know enough about its Japan operations to comment too knowledgeably, but considering Baidu’s previous record of failure in almost everything it does outside its domestic search business, I wouldn’t be surprised to see its Japan search initiative shuttered in the next 1-2 years. While the Japan business struggles, Baidu’s newly announced tie-up with Microsoft looks silly at best, and in reality seems to smell of desperation by both sides. That tie-up will see Microsoft supplying English-language search services to Baidu through its struggling Bing search engine, launched with fanfare a couple of years ago as a rival to Google (Nasdaq: GOOG) but which has made little impact on the market since then. (English article) To state the obvious, the English language search market in China is tiny and insignificant, and the small number of people who actually conduct English-language searches there are much more likely to go to Google or Yahoo (Nasdaq: YHOO) than to Baidu, which has no name in that space. These kind of desperate initiatives are just the latest examples of Baidu’s inability to diversify beyond its Chinese search business, which will leave it highly vulnerable when the market starts to slow or if another credible competitor comes along.

Bottom line: Baidu’s struggling Japan business and its new Microsoft tie-up are the latest examples of its inability to execute significant initiatives outside its core search business.

百度财报称海外项目拓展亏损巨大，近期则宣布与微软<MSFT.O>进行一项看似意义寥寥的合作，再次证明其开拓在线搜索以外业务方面的笨拙。中国媒体援引百度近期向美国证交会（SEC）提交的文件称，百度过去三年在海外市场累计亏损近7亿元人民币，主要原因是其日文搜索引擎发展较缓。令人担忧的事实还包括，在过去三年，百度海外亏损额每年呈递增趋势，从2008年亏损约2亿元到去年亏损2.6亿元。我对百度日本运营不够了解，因此不敢妄加评论，但鉴於百度除国内搜索外的其他业务几乎全部失败的纪录，如果该公司在未来一两年关闭日文搜索业务，我不会感到惊讶。而百度日前宣布与微软合作，此举看似十分愚蠢，实际上可嗅出两家公司的绝望。微软将利用其必应(Bing)搜索引擎，向百度提供英文搜索服务。微软几年前大张旗鼓推出必应，以此与谷歌<GOOG. O>进行竞争，但在市场中并未掀起什麽波澜。显而易见的是，中国的英文搜索市场规模小且无关紧要，况且在中国需要进行英文搜索的那一小部分人，更可能使用谷歌或雅虎<YHOO.O>，而不是百度。这种绝望性质的项目只是百度无法开拓国内搜索以外业务的最新例证，如果中国国内搜索市场开始放缓或百度在其中遭遇强劲对手，百度的业绩则极易受到冲击。

一句话：百度日本运营陷入困境及其与微软合作的最新举措，这都是百度开拓国内搜索以外业务的无力表现的最新例证。