By Chris Chang, posted Feb 4, 2011 at 5:12 PM, 203 views,

Baidu Developing Social Network Service

Everyone is wondering what Mark Zuckerberg and Baidu CEO Robin Li had discussed about during their meeting last year December. Well, looks like we have an answer here. Baidu has recently announced the development and expansion for more social networking services to keep its strong momentum and dominance in the Chinese Internet landscape. And at the same time, Baidu aims to challenge Tencent.

Baidu CEO Robin Li has announced that the company will develop more social networking services and aims to derive more revenue from the project. Li even said the commercial value of social products is “meaningful”. While Facebook and Twitter are blocked behind China’s great firewall, Baidu could take this chance to join in the game and compete with Sina Microblog and Tencent’s social-networking services. By going social, Baidu could gain more users outside its search engine business.

Apparently, Baidu is making big money from its “Pheonix Nest” advertising system, which works like Google’s AdWords. The system allows advertisers to place their ads on the top 3 positions of sponsored links before the organic search results. How it attracts users to click? Well, the ads look identical to the regular search results except for “sponsored” being written in small letters. This means users can see which results are ads, but will probably never notice unless they specifically look. Lots of Chinese netizens clicked the ads without any hesitation. What’s more, Baidu has an online video service called Qiyi.com, which works like Hulu. The website now has more than 100 million users while offering hit TV shows to all Chinese netizens.

At the meantime, Baidu has dominated 75.5 percent of China’s search-engine market, and we think going social is actually a good start for Baidu to evolve into an all-in-one social network in China. What do you think?

Source: Bloomberg