BEIJING—Anger over advertising practices on search giant Baidu
Inc. has shed light on the murky online environment for patients
seeking information about their diseases, in a country where
Internet search is subject to censorship and dominated by one
company.
Baidu is facing harsh criticism following the death of college
student Wei Zexi after he tried an alternative treatment for
synovial sarcoma, a rare form of tissue cancer. Mr. Wei and his
family found the treatment through a sponsored Baidu link.
Chinese users have criticized Baidu's handling of search results
before, but Mr. Wei's case was met with particular vigor. Chinese
authorities have launched an investigation of Baidu, and the State
Administration for Industry and Commerce said Thursday it was
cracking down on questionable Internet-advertising practices. The
company's stock has plunged more than 9% since reports of the
investigation surfaced Monday.
China has promoted its homegrown technology companies over
foreign firms, a push that has intensified as Beijing increasingly
looks to technology-related industries to drive economic growth.
U.S. search giant Google left China after declining to censor its
results in 2010, and Google searches are blocked.
State media commentaries on the Baidu affair suggested the
government was adding pressure on Baidu to clean up its act. A
Sunday commentary in the Communist Party's official newspaper, the
People's Daily, said, "If a company is only chasing the economic
benefits and ignoring the social benefits, abandoning trust and
forgetting about responsibilities, how much further can it advance
as a business?"
On social media, users urged a boycott of Baidu, with some
calling for the return of Google to China. One user of
microblogging service Weibo wrote, "Without competition, Baidu is a
swindler. This is the evil of monopoly."
The fact that the comments weren't immediately blocked was seen
as a sign the government was allowing the public to air its
frustration with Baidu, even if it meant comparing it to Google.
Later in the week, some comments appeared to have been taken
down.
King-Wa Fu, an associate professor at the University of Hong
Kong who analyzes censorship trends, said it appeared the
government was beginning to clamp down on the Baidu bashing.
"It's not uncommon for the state to exercise no control on
public discussion for the first few days but then ask state media
to stop reporting and then start censoring" issues like this, Mr.
Fu said.
The People's Daily also changed its tone. In a commentary on the
Wei Zexi tragedy on Friday, the paper didn't mention Baidu, but
instead castigated Chinese patients with terminal diseases for
clinging to unrealistic hope.
Medical research papers are available online via Chinese
databases, but large numbers of Chinese still prefer advice from
fellow patients in online forums. That has made Baidu the main
go-to site for medical information.
In January, Baidu came under criticism after it sold the rights
to moderate such a forum for patients with hemophilia to a company
that Internet users said populated the site with questionable
information. Baidu has since said it has stopped commercial
operation of the forums.
The same month, 37 nongovernmental organizations reported Baidu
to the commerce bureau in Beijing's Haidian district, where the
company has its headquarters, saying that misleading medical
advertising on Baidu caused physical trauma for patients and
economic losses for families. Local state media reported this week
that the Haidian Administration of Industry and Commerce is
investigating the complaint. A person answering the phone at the
Hadian agency said she had no information on the matter.
The stakes are high for Baidu because much of its revenue comes
from advertising, with medical care one of its top sectors. During
Baidu's latest quarter, 94% of its revenue came from online
advertising. Baidu doesn't break down advertising revenue by
sector; J.P. Morgan estimated that medical and health-care
advertisers accounted for 15% to 25% of Baidu's total revenue in
2014.
Many Web-search companies have specific policies for
health-related ads, along with ads involving gambling and alcohol,
with algorithms and humans working to spot suspicious ads. It is
unclear how Baidu combs through its medical ads and search results.
A Baidu spokeswoman declined to comment, citing the continuing
investigation.
By the end of the week, searches on Baidu for various diseases
and medical outlets yielded no sponsored links.
Like other search companies, Baidu doesn't give details on how
its search algorithm, what it calls its "secret sauce," works.
To identify ads, Baidu places small gray wording at the bottom
of the link displayed in a search saying "tui guang," or promotion.
Critics say using that word instead of "guang gao," or
advertisement, and lumping sponsored results in with regular ones
is misleading.
"The issue is how do you blend them?" said a person familiar
with the search business in China. "Baidu uses the ambiguous word
'promotion' on the bottom and it's not very noticeable."
By contrast, Google marks its sponsored links atop its
presentation of search results in a yellow box. On Yahoo, sponsored
links are identified via words in bold type that say "ads related
to," along with a gray line that demarcates the end of the
sponsored links and the beginning of news and search results.
When searching "cancer" on Google, top results include academic
articles and public organizations such as the American Cancer
Society. The same search on Baidu links to a number of Baidu
medical forums or ads.
Complaints about Baidu's advertising practices aren't limited to
users. As China's biggest search engine by far, Baidu has faced
complaints from advertisers about its tough negotiating tactics.
They say the company requires them to ramp up advertising spending
each year, which leaves them little money for marketing on other
platforms. Baidu declined to comment on the matter.
Fanfan Wang contributed to this article
(END) Dow Jones Newswires
May 06, 2016 08:25 ET (12:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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