Baidu Inc, China's largest search portal, has announced its full-scale entry to the Japanese market. The company will embark on its first entry into an overseas market, with a brilliant history where it quickly overcame other search and portal sites and grew into an enterprise boasting a 70% share, despite having started much later than its rivals.
On the other hand, many wonder how far Baidu can exert its power in the Japanese market, where Yahoo! and Google dominate, without the support of the Chinese government. Tech-On! interviewed Baidu's Chairman and CEO Robin Li about the company's strategy and challenges it is facing in the Japanese market.
Q: Why did you choose Japan as Baidu's first overseas market?
Li: Baidu has consistently operated its business targeting the Chinese market for the last eight years. I lived in the US for eight years before that. I was working for IT companies in the US for six years during that time. For two and a half years before leaving the US, I worked for Infoseek, a leading search portal in Silicon Valley, and developed Infoseek's second-generation search engine.
I am, therefore, familiar with international search technologies as well. I had no intention of keeping Baidu inside China from the start. Now that we have won a 70% share in China, I think it's natural that we turn to overseas markets.
I consider the Japanese market to be very attractive. There are several reasons for that. First, the Japanese market is huge. Japan boasts the world's second largest economy, as well as a high Internet penetration rate of about 70% of the population. As a search engine company, we found to be Japan very attractive indeed.
Second, Yahoo! and Google, both of which are currently enjoying large shares in Japan, are not Japan-based companies. Same as us, they are also overseas companies in the Japanese market and bring their technologies from outside Japan. Hence, Baidu has no inborn handicaps when competing with these companies in the Japanese market.
Third, as China and Japan have strong regional connections, staff members in these countries can easily have relationships. If one of our staff members in Beijing travels to Japan on business, for example, it only takes three hours by plane.
Given the small time difference between the two countries, contact by phone and email is easy, too. Considering the distance and the time difference between Japan and the US, being a Chinese company must be an advantage.
In addition, there are linguistic similarities between Japanese and Chinese. Both languages use double-byte characters and have no spaces between words. When it comes to natural processing of such languages, systems must divide text into units of words first and then analyze the meaning. Such an analysis technology does not exist in the English environment.
After operating a search engine in China for eight years, we have built up considerable experience in this area. I think this expertise can be applied to the analysis technology for the Japanese search engine.
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