Baidu Inc. said new features on itswebsite may erode search-engine traffic, the main revenue sourcefor China 's biggest Internet company by market value.
"Baidu relies on search traffic volume to make money,"Chief Executive Officer Robin Li said today. "The new homepagemay have a negative impact on search traffic volume, but it isOK because it is good for users, and will in the long-termbenefit Baidu."
Li is moving Baidu away from a style that resembled U.S.rival Google Inc.'s search site by adding a section thatpromotes applications developed by external partners and linksto other websites. The revamp comes as Baidu develops servicessuch as online commerce and video to challenge rivals including Tencent Holdings Ltd. (700) , China's biggest online-games company.
Baidu's American depositary receipts fell 1 percent to$144.29 in Nasdaq Stock Market trading yesterday, valuing thecompany at $50.3 billion. The stock has gained 49 percent thisyear after more than doubling in 2010, outperforming the HongKong-traded shares of Tencent, and Alibaba.com Ltd. (1688) , thebusiness-to-business unit of Alibaba Group, the country'sbiggest e-commerce company.
Baidu has been diverging from Google's strategy to make itsservice more suited to the Chinese market, Li said at aconference in Beijing today. The two companies' paths divergedyears ago, when Baidu started its Tieba information-sharingservice, he said.
Li, ranked China's richest man by Forbes magazine, didn'tcomment on how the new website design may affect revenue.
Baidu accounted for 75.9 percent of China's search-enginemarket by revenue in the second-quarter and 75.8 percent in theprevious three months, according to research company AnalysysInternational. Google's share dropped to 18.9 percent from 19.2percent, the researcher said.
Google has been losing ground in China's search-enginemarket since January 2010, when the Mountain View , California-based company said it was no longer willing to comply withChinese regulations to self-censor Web content. Two monthslater, the U.S. company shut its Google.cn service andredirected Chinese users to its site in Hong Kong .
To contact the editor responsible for this story:Young-Sam Cho at ycho2@bloomberg.net
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