In order to understand the operations and significance of one big business within the world, it is often illuminating to compare and contrast that business with another similar business within the world and highlight both the similarities and the differences of those businesses. This sample business comparison provided by Ultius will compare and contrast the two giant tech companies Google and Baidu in five main parts:
- An overview of Google
- An overview of Baidu
- The similarities between the companies
- The differences between the companies
- A critical reflection on which company is the better one in both practical and moral terms
Which is Better: Google or Baidu?
Overview of Google
Google is a company out of Silicon Valley that has emerged to become the single most dominant search engine company across the world. It was founded by Larry Page and Sergei Brin. As Google’s own record of its history has indicated, the company’s rise has been steady and meteoric over the course of the years since the company was founded in 1998. Google steadily included one service after another in its portfolio and included one company after another under its umbrella; and by now, Google is known not only for its search engine but also for key Internet services such as Gmail, YouTube, and Android smartphone software. By now, the situation has gotten to a point where it would be almost unthinkable for most Internet users for Google to not exist, or to have an online experience that does not involve a Google product or service in some way.
The rise of Alphabet
Google, becoming aware of its own vast diversity as a company and surpassing its rival, Bing, recently made the move of creating a new company that can serve as the umbrella for all of Google’s products and services. This company was given the name of Alphabet. Google will be a key part of the broader company now called Alphabet. As Lashinsky has written:
“Alphabet will house the company’s goofier experiments, including its self-driving car, Google X, and health-related investigations as well as more offbeat creations like Nest and two investment arms” (paragraph 2).
This move testifies to the basic creativity that has been at the heart of Google since its inception. The company is not content with merely resting with all the money it has made, rather pursuing new and innovative avenues of research and development. In this framework, Google itself would be the primary source of revenue for the various other products and services pursued by Alphabet.
Overview of Baidu
According to Baidu itself,
[the company] was founded in 2000 by Internet pioneer Robin Li, creator of visionary search technology Hyperlink Analysis, with the mission of providing people with the best way to find information and connect users with services. over the past decade we have strived to fulfill this mission by listening carefully to our users’ needs and wants. . . . Our deep understanding of Chinese language and culture is central to our success. (paragraph 2)
Baidu is a Chinese company working within the Chinese economy, and it actually remains the most dominant search engine within the nation of China, even as Google has proven to be wildly successful in virtually every other part of the planet. Baidu holds the leading market share within China within the search engine arena.
Business model of Baidu
Baidu’s general business model is premised on the provision of web-based services. As Nath has written:
“Baidu offers performance based market services and displays advertisements through its own website and other affiliated websites” (paragraph 5).
Moreover, one of Baidu’s key advantages within the Chinese market is the extent to which its products and services are integrated and interoperable with the products and services of other Chinese companies such as Alibaba and Lenovo. Essentially, this synergy among the companies helps to lock out non-Chinese companies from the market and discourages foreign competitive threat, insofar as the interoperability itself provides a dimension of value that other rival companies may not be able to offer. However, this itself comes with its own set of risks for the Chinese consumer, as we will see soon enough.
Similarities of Google and Baidu
The similarities between Google and Baidu are simple enough to observe. Both are huge companies within the search engine arena. Google is the largest search engine company in the world, and Baidu is the largest search engine company in China (with China, of course, constituting a large part of the world, given the nation’s massive population). As Robertson has put the matter:
When it comes to Internet in China, no company is even remotely as big as Baidu Inc., which processes more than 80 percent of the country’s online queries, according to Bloomberg Industries. It’s a mirror image of Google Inc.’s ascendant position atop the U.S. search market.
There are thus basic commonalities between the business models involved in Google’s core services and Baidu’s core services, insofar as these commonalities inhere to the nature of the industry itself. Both companies, for example, generate their revenue through ad placement services. At this basic level, then, the analogies between Google and Baidu are easy to draw; it does not exactly take an expert in the field of business to do it. What the general population perceives to be similarities between the companies are in fact actual similarities between the companies.
Differences between Google and Baidu
Past these superficial similarities, however, critical differences emerge between Google and Baidu. One of the primary issues is perhaps restriction by governmental censorship. As a leading company within the nation of China, Baidu is compelled to cooperate with China’s censorship laws. Indeed, Google primarily left China out of a refusal to cooperate with such laws. As Wood and Suzor have written:
All search engines with servers in China, including Baidu, conform to Chinese law by sanitising their results. For other search engines, including Google, users who search for banned words find themselves temporarily cut off from the search engine (paragraph 14).
This would seem to go against the grain of the very nature and purpose of a search engine, and it marks a serious point of divergence between the operations of Google on the one hand and the operations of Baidu on the other.
Baidu’s business practices called into question
Moreover, it would seem that Baidu has a tendency to engage in somewhat questionable business practices in the global marketplace. For example, a call has recently emerged within China for the boycott of Baidu. Huang has reported on the matter in the following way:
This week, though, tens of thousands of Chinese citizens pledged to boycott Baidu entirely, after they discovered the Beijing company has been earning profits by giving chronically ill users biased information through its chat rooms, known as ‘post bar’ services. (paragraph 2)
In contrast, corporate ethics clearly emerges as an absolutely central tenet of Google’s own value proposition to its customers: the company’s own history indicates a long history of commitment to issues pertaining to social justice and diversity.
Directions for the future
Finally, it is also worth considering the divergent current trajectories of the two companies. Robertson, for example, has made the following comparison:
Baidu’s stock has dropped more than 40 percent the past two years. The Beijing-based company faces a slowdown in advertising in its home market and struggles to expand beyond search. Meanwhile, Mountain View, California-based Google is trading at all-time high, fueled by increased spending on mobile and video ads. (paragraph 3)
This would seem to point toward a basic dynamism possessed by Google that is lacked by Baidu. Google is essentially riding a huge wave within the tech industry, whereas Baidu would seem to be struggling to simply stay afloat and prevent its past achievements from slipping away.
On the basis of the above comparative analysis, a key conclusion that can be drawn is that Google is surely a stronger company than Baidu. At the superficial level, the similarity can be noted that Google is to the United States what Baidu is to China. However, this misses the basic point that Baidu’s success has occurred within what is essentially a government price controlled market, with much of the company’s value being premised on what is specific to China itself and to the business environment within China. Google, on the other hand, is functioning within a free market that includes not only the United States but also much of the world. Therefore, while Google still has a great deal of room for growth and expansion, it would seem that Baidu has hit something of a ceiling. This is especially evident in the fact that whereas Google seems to have an apparently endless array of projects and pursuits in mind (now subsumed under the broader company Alphabet), Baidu is struggling to expand its products and services beyond the simple search engine.
Google: The clear favorite
A broader point could perhaps be made regarding how the Chinese economic model, while perhaps efficient and capable of taking advantage of the enormous manpower of that nation, is not very effective at fostering genuine creativity. The fact that Baidu is hitting upper limits in its development provides a kind of evidence for this assertion. Likewise, the fact that Baidu is only popular within China and really nowhere else in the world also seems vaguely symbolic of the closed nature of China’s society relative to the world as a whole, and the fact that Baidu is operating within a relatively closed market. In places where people have had a real choice between either using Google or using Baidu, Google has clearly been the overwhelming favorite. Likewise, it is worth pointing out that Google is not even competing with Baidu at the present time, due to the fact that Google refused to put up with the coercive and repressive business environment that prevails in China.
A key point that has been made here is that although there are superficial similarities between Google’s position within the United States and Baidu’s position within China, there are serious structural differences between the companies at a deeper level. In particular, Google is characterized by ongoing creativity and innovation, whereas Baidu seems to be hitting the ceiling and currently in a period of stagnation. This probably says something more broadly about the difference between the American and the Chinese economic models in general.
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Huang, Zheping. “Chinese Citizens Are Boycotting Search Engine Baidu – and Praying for Google to Come Back.” Quartz. 14 Jan. 2016. Web. 29 Apr. 2016 .
Lashinsky, Adam. “Why Google Changed Its Name to Alphabet.” Fortune. 11 Aug. 2015. Web. 29 Apr. 2016. .
Nath, Trevir. “Baidu versus Google: Who Will Win the Global Search War?” Investopedia. n.d. Web. 29 Apr. 2016. .
Robertson, Jordan. “A Tale of Two Search Engines: Why Google is Winning, Baidu Isn’t.” Bloomberg. 1 May 2013. Web. 29 Apr. 2016..
Wood, Suzannah, and Nicolas Suzor. “The Perfect Paradox: Free Speech and the Right to Censor.” The Conversation. 8 Apr. 2014. Web. 29 Apr. 2016. .