In a press release, Baidu's Chief Executive, Robin Li, revealed that Liu had resigned for undisclosed personal reasons. However, he also said that Liu was only willing to leave once he had implemented the latest iteration of Baidu's search software development. Li Stated:
"We'll continue to ensure Baidu's search leadership by hiring the best talent and pursuing our strategy of developing products that users want."
Commenting on his resignation, Liu said, "It has been a great privilege to play a role in making Baidu the leader in Chinese search."
Investor confidence in the company looks to be shaken, as Jerry Liu has been instrumental in developing the search engine algorithms used by Baidu, and has also been responsible for many technological innovations leading to the site's status as China's top search engine. Dubbed "China's Google," Baidu is at the forefront of the market with the second largest population of internet users in the world after the United States; about 123 million people use the internet in China, and Baidu accounts for approximately 62% of all search traffic undertaken, compared to Google's estimated 25%.
Baidu has also recently hit the news for being the first search engine to attempt circumvention of the extremely strict internet restrictions placed upon all media and content on the internet in China - the country is one of a very few websites with a nationwide government-imposed firewall. Viacom has signed an exclusive deal between their MTV brand and the Baidu engine to try and increase their brand awareness and market share in such a tightly regulated environment. Over 15,000 hours of content are being made available to Baidu, with a huge range of material spanning from "Dora The Explorer" to "Pimp My Ride." Baidu has also agreed to provide the company with the first ever branded area on the front page of the search engine, dubbed "MTV Zone." Predictions for the uptake of this service are cautiously optimistic; but there is underlying worry that the Chinese government will ban the content - especially seeing as how arbitrary the selection criteria for banned material seems to be.
Most content will be free to explore and use after viewing some advertisements, but more premium content, such as music videos, will require a small payment.
Some of us might suspect that Google are kicking themselves; after all, Baidu succeeded in wrestling search market shares away from Google in China. Baidu was at 52% while Google stood at 33% in August 2005, but the Chinese search engine's shares then grew to 62% while Google's decreased to 25% in August 2006. Not only that, but Google bought 2.6% of the Baidu shares at the IPO, then sold them a couple of years ago; even though Baidu's current revenue stream is tiny compared to Google's. If the current 100-150% growth in revenue continues, Baidu could be reporting profits of up to $700 million towards the third quarter of 2008. That's not exactly pocket change, even for Google.
