Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Google's Loss is Baidu's Gain, Again

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

In a familiar scene, Google (Nasdaq: GOOG  ) is staging a retreat out of China, and Baidu (Nasdaq: BIDU  ) is positioned to be its biggest beneficiary.

Google said on Friday that it will be shutting down Google Music Search in China next month. It seemed like a good idea when the world's biggest search engine introduced the service four years ago.

After seeing Yahoo! (Nasdaq: YHOO  ) lose a legal battle in China in 2007, and seeing homegrown search stars Baidu and's (Nasdaq: SOHU  ) Sogou come under fire for making it too easy to find pirated MP3 files on their sites, Google tried to take the high road. Big G negotiated with the record labels to roll out a licensed music service.

A free ad-supported music downloading service was probably never supposed to be a permanent solution. As China's economy evolved and piracy was curbed, a more traditional premium music service would be the better solution. However, Google Music Search stuck around even after Google officially backed out of China in traditional search two years ago.

"We have decided we are no longer willing to continue censoring our results on, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all," Google argued in 2010.

Some argue that Google was merely saving face at the time. It may have been leaving China on principle, but even at its peak, its market share in search was only just a little more than half of what Baidu was commanding.

It remains to be seen what effect this will have on Baidu, which rolled out its own legal music service last year. Obviously having one less rival around will make life easier. Baidu went from commanding nearly two-thirds of China's search market when Google was around to as much as 80% recently.

Obviously, music search will never be as lucrative as traditional search. There's only so much that advertisers are willing to pay for young users looking for free tunes. It's still something that will help Baidu, and possibly even as it wages a war in traditional search with Qihoo 360's (NYSE: QIHU  ) emerging challenge.

And the beat goes on.

Betting on China
If you prefer a safer way to grab some overseas sizzle, a new report details three American companies destined to dominate the world. It's a free report. Click here to read more.

There's also a premium report on Baidu that dives deep into China's dot-com darling. The premium research comes with a year's worth of updates. Click here to get started now.

The Motley Fool owns shares of and Google. Motley Fool newsletter services have recommended buying shares of,, and Google. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2028876, ~/Articles/ArticleHandler.aspx, 10/24/2016 9:05:08 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 days ago Sponsored by:
DOW 18,145.71 -16.64 0.00%
S&P 500 2,141.16 -0.18 0.00%
NASD 5,257.40 0.00 0.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
BIDU $176.76 Down +0.00 +0.00%
Baidu CAPS Rating: *****
GOOGL $824.06 Down +0.00 +0.00%
Alphabet (A shares… CAPS Rating: *****
QIHU.DL $0.00 Down +0.00 +0.00%
Qihoo 360 Technolo… CAPS Rating: **
SOHU $42.51 Down +0.00 +0.00% CAPS Rating: ***
YHOO $42.17 Down +0.00 +0.00%
Yahoo CAPS Rating: **