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The Squeeze at China's Baidu

Former clients say their rankings fall if they decline to buy sponsored links
Danijel Zezelj

Beijing - For months, the Web site China City Map ranked among the top results for the Chinese term "provincial map" on Google (GOOG) and other search engines, including China's No. 1 player, Baidu (BIDU). Then in August, salesmen representing Baidu asked the site to buy ads that would appear after a user typed in words related to maps in China. Chief Executive Michael Chen declined, figuring he was doing just fine without the ads. But in September, the site vanished from Baidu's results, though it still ranked high on Google and Yahoo! (YHOO) Traffic dropped by 90%. "If you have problems with Baidu," says Chen, "you're basically dead."

Chen isn't alone in feeling Baidu is abusing its position as China's search leader. Salespeople working for Baidu drop sites from results to bully companies into buying sponsored links, say some who have been approached. Former clients say their rankings fall precipitously after they stop buying search-related ads from Baidu. At least one Baidu salesperson acknowledges they're right. "The key is whether a company buys Baidu's sponsored links," says Zhong Hongjun, a salesman from a company that represents Baidu in the central city of Wuhan. "If they don't, the search engine won't find them. If they do, they'll be in there."