Yesterday, China’s Ministry of Culture (MoC), warned that it would strengthen checks and policing of online music content. The MoC said that search engines, which have been a source of pirated music in China, can only provide search information for tracks from legitimate music companies. This move may pose as a serious problem for China’s most popular search engine Baidu, which has long faced legal issues surrounding its index of pirated music.

According to the report, the MoC is requiring that companies providing online music streams or downloads gain approval as “Internet culture companies,” and only companies that have directly obtained broadcasting or licensing rights can apply for approval. Imported music that is already broadcast online in China but has not been approved must be submitted to the MoC before December 31, 2009.

The impact this will have on Baidu is noted by Pali Research’s analyst Tian Hou, who estimates that as much as 80 percent of Baidu’s traffic is from music search. Hou says that with respect to music search results, most of the links provided are posted by illegitimate music companies. If these links are cut off, says Hou, traffic to Baidu could decrease.

According to comScore, Baidu had 145 million unique visitors in July of 2009 worldwide (with more than 95 percent of those coming from Asia), while its MP3 search engine attracted 47 million uniques, which is only 32 percent but still significant. For July, Baidu was ranking fifth amongst most visited search engines worldwide, behind Google, Yahoo, Bing and Ask.com.

The success of Baidu has been credited to its index of music which is available from its front page, something Google caught onto last year when it entered a joint venture with Top100.cn to offer free and legal music in China. Baidu’s potential troubles could be good news for Google China, which took the beta label off of its music search engine this March and signed major deals to license music from four major music labels (Warner, Universal, EMI and Sony). Google China, however, just lost its top executive, Kaifu Lee.

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The site offers over a million music tracks thanks to a partnership with Top100.cn (a company co-founded by basketball start Yao Ming which Google has invested in), most of them Chinese but also foreign tunes approved by the government. For example, users can download the latest Metallica album free of charge, of which you can see a screenshot below. Apart from the four labels mentioned above, several major publishers and 140+ indie labels are said to be on board.

Google will share ad revenue sold on the music site, generating sales for record companies in a market where 99% of all downloads are illegal, according to the International Federation of the Phonographic Industry (IFPI).

Google is making this move to gain more ground on Baidu, the leading search engine in China, which has been offering free MP3s for years, part of the reason why it became the leader in the first place (it has roughly double the market share in search than Google). A Baidu representative has already responded to the launch of the new MP3 search engine, saying Google is entering the game too late and that this particular ship has long sailed.

The niftiest part of the music search engine is the Songscreener, an innovative way to discover new tunes based on your current mood and more specific details like the tone, timbre, age, language and genre of music you would like to explore. Google is also said to be experimenting with a voice search feature for the music search engine.

The company has no plans to expand the service outside of China, a representative told Reuters.

(Hat tip to Web2Asia – via Twitter – and Outdustry)

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What were the top social media sites of 2008? ComScore came out with its worldwide traffic stats for November a few days ago (so these don’t include December). They are a mix of social networks and blogging platforms. Blogger, the orange line in the chart above, still rules the roost with an estimated 222 million unique worldwide visitors in November (up 44 percent from November, 2007). Facebook, the blue line, is on pace to pass it soon with 200 million unique visitors (up 116 percent). (Note, though, that this is more than the 140 million active users Facebook itself reports—go figure). MySpace is pretty steady at 126 million uniques. Wordpress is a close fourth and gaining with 114 million (up 68 percent). And Windows Live Spaces is down 22 percent to 87 million uniques.

ComScore keeps a list of what it calls “social networking” sites, but these include blogging platforms and other social media sites as well. While the audience for blogs is still showing healthy growth overall, Facebook stands out as the social gorilla taking share from not only other social networks but blogs and other social media as well.

Below are the top 20 sites on comScore’s social networking list. It is really more of a social media site list, which is what I’m renaming it for this post. It is not definitive, but it gives a good lay of the land. (Here is a similar ranking from 2007). Note on this list the stubborn persistence of Yahoo’s Geocities at No. 6, the rise of Yahoo’s Flickr at No. 7, Six Apart at No. 10, and the presences of Chinese sites like Baidu Space and 56.com. The real surprise, though, is document-sharing site Scribd at No. 16, with nearly 24 million worldwide uniques.

Top Social Media Sites (ranked by unique worldwide visitors November, 2008; comScore)

1. Blogger (222 million)
2. Facebook (200 million)
3. MySpace (126 million)
4. Wordpress (114 million)
5. Windows Live Spaces (87 million)
6. Yahoo Geocities (69 million)
7. Flickr (64 million)
8. hi5 (58 million)
9. Orkut (46 million)
10. Six Apart (46 million)
11. Baidu Space (40 million)
12. Friendster (31 million)
13. 56.com (29 million)
14. Webs.com (24 million)
15. Bebo (24 million)
16. Scribd (23 million)
17. Lycos Tripod (23 million)
18. Tagged (22 million)
19. imeem (22 million)
20. Netlog (21 million)

Here’s a screenshot of the actual data (as you can see, I rounded above):

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Here are the main search market share percentage numbers in the U.S. from comScore:

Company—–July search share—Change from June, 2008

Google:                    61.9                           +0.4

Yahoo:                     20.5                            -0.4

AOL:                          4.5                           +0.2

Microsoft:                  8.9                             -0.3

Ask:                           4.2                           +0.1

According to the latest search query and market share numbers from comScore for July, Google’s U.S. market share inched upward to 61.9 percent (from 61.5 percent in June).  While Google gained 0.4 percentage points in market share inJuly, yahoo lost the same amount.

And its search query volume in the U.S. held steady at a healthy 33.2 percent year-over-year rate (and accelreated slightly to 11.7 percent on a quarter-over-quarter basis).  That quarter-over-quarter rate is what caused investor concern earlier this year, when it troughed at -0.3 percent in February.  Since then it has re-accelerated every month to 4.4 percent in March, 6.1 percent in April, 9.9 percent in May, 10.0 percent in June, and now 11.7 percent in July.

Woldwide, Google’s search share declined from 67.9 percent in June to 64.1 percent in July. This drop was largely due changes in the way comScore measures search and Web traffic in China, Brazil, and Russia.  As a result, Baidu’s global search market share went from 7.7 percent in June to 12.9 percent in July (based almost entirely on its strength in China alone).  That makes Baidu the third largest search engine the world after Yahoo.

What the recalculation highlights is that Google faces more challenges to its dominance abroad than in the U.S.  Baidu’s global quarter-over-quarter search query volume grew 98 percent in July, compared to 3.2 percent global growth for Google.

Here are the global numbers with Baidu (China) and NHN (South Korea Russia):

Company—–July search share—–Change from June, 2008

Google:                    64.1                                  -3.8

Yahoo:                     14.6                                  -1.0

Baidu                       12.9                                  +5.2

Microsoft:                  3.6                                   -0.2

NHN                          2.1                                  -0.2

Ask:                           1.6                                  -0.1

AOL:                            1.0                                  -0.1

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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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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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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.

Update: Google JV partner is believed to be Top100.cn.

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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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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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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 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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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.

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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.

Update: Danny Sullivan has confirmation on the block and redirect from Google.

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The NASDAQ listed Baidu dominates mainland search, in a big way due to its thorough indexing of illegal music and video and related search capabilities, a service that Google either refuses to or cant compete with.

It would seem that it’s not just MP3’s that bring Chinese users to Baidu, it appears that ISP level redirects do as well.

Reno Peng, a Chinese developer I occasionally correspond with on Skype and over Twitter discovered that typing in blogsearch.google.com into a browser in his Shanghai office over a internet connection provided by the NYSE listed China NetCom resulted in this:

(image cropped to fit post)

China NetCom is a major player in the Chinese ISP market and is the second biggest provider in the country.

We can’t confirm as yet whether this is a one off restricted to just Shanghai or applicable to all China NetCom access points. We also don’t know whether this is an initiative of Baidu or China NetCom, or both. Given both are listed in the United States they should rightfully answer as to whether they are indeed hijacking Google traffic; after all, it’s not very sporting of them to do so.

Update: the redirects are more widespread than we first thought. 

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Alibaba.com Ltd. and Alibaba.com Corp. will sell a combined 858.9 million shares (17%) in Alibaba.com at HK$10 to HK$12 apiece, with Yahoo, currently a 40% share holder in the Alibaba Group buying HK$776 million of the IPO shares, resulting in 8.2% ownership of Alibaba.com Ltd, the newly listed IPO entity.

As we reported in July, the IPO will see the partial spin-off of Alibaba.com from the Alibaba Group, the China based holding company that owns sites including Alipay, Taabao.com and Yahoo China.

The IPO will value Alibaba.com at up to $7.8 billion.

As Bloomberg reports, the Hong Kong IPO is likely to encourage other China based companies to consider listing locally as opposed to the NASDAQ only, where many leading Chinese ecommerce ventures are currently listed.

In related news, Baidu’s market cap has now passed $10 billion, up from $7.97 billion September 17. At close of trade 15 October Baidu stocks closed at $314.95 for a market cap of $10.69 billion, nearly double the market cap the company had in August.

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“Baidu TV,” the result of a partnership between Baidu and Ads it! Media Corporation, will provide advertisers access to approximately 160,000 China based websites participating in the Baidu Union program, Baidu’s version of Google Adsense, with a potential audience of 140 million people.

Under the program publishers are able to chose where they can post video ads.

The NASDAQ listed Baidu has a market cap of $7.97 billion, up from $5.73 billion when we last mentioned Baidu in August, a 39% increase in their stock price in just under a month. Baidu holds a 55% share of the Chinese search market.

(in part via WSJ)

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Google has previously focused on building partnerships in China, with Google technology powering Chinese search portals Sina.com, Soso.com and 163.com. Google also made a strategic investment in popular Chinese browser Maxthon in April.

The Chinese acquisition strategy for Google would not seem as difficult as might immediately be presumed; a number of the leading Chinese search companies are listed on the NASDAQ. Market leader Baidu sits at the less appealing (from an acquisition viewpoint) market cap of $5.73 billion, however lesser players are well within a more likely price for a Google acquisition; No 2 ranked search player* NetEase.com (163.com) has a market cap of $1.78 billion and third placed Sohu.com has a market cap of $1.08 billion.

Baidu.com currently dominates the Chinese search market with a market share of around 55%

* traffic rankings per Alexa May 2007. 

(in part via PC World)

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Spotted first by Search Engine Journal, the Google logo is now present in Soso.com search results, and joins 163.com in Google’s quest to conquer China.

It has been a difficult market for Google from the beginning. The ethical questions in relation to censorship caused Google to hold back on services such as gmail for Google.cn whilst the NASDAQ listed Baidu.com continued to dominate the local search market.

As of April, Baidu’s market share is reminiscent of Google’s domination in other nations, Baidu having 55% search market share in China to Google’s 21.7%.

Google’s traditional foe Yahoo is only just on the radar in China. Although rated in a 2006 market share report as being China’s No. 3 search engine, market share as of June 2006 was a low 5.7%. If Alexa data can be trusted, Yahoo.cn has since slipped to 7th place on traffic behind Baidu.com, 163.com (powered by Google, 2), Sohu.com (3), Google.cn (4), SoSo.com (powered by Google, 5) and Sina.com (6). It should be noted that a number of sites, such as Sina.com compete not only in search but services as well, Sina.com being best known in the West for offering a blogging platform.

Google’s China partners Soso.com and 163.com also use Google’s Adwords advertising platform. Google previously held a 2.6% stake in Baidu.com which it sold in 2006.

The importance of China to Google should not be underestimated. China has around 150 million people online and is expected to have more broadband users than the United States in the next 12-24 months.

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Blogging in China is tricky business to say the least. And it’s fairly competitive – Bokee, BlogCN, ChinaBlog, Sina Blog and Sohu Blog all have competitive offerings and lots of users. Nevertheless, China is a huge market (the second largest internet audience after the U.S.) and has an active blogging community. And some of the blogs are masssive.

Someday, this massive community of people writing and conversing can bring China out of the dark ages freedom-wise. The more people that blog in and about China, the better.