The music makers have had it with Baidu (Nasdaq: BIDU).
Chinese and international record labels bonded together this morning, asking the leading search engine's advertisers to boycott Baidu as a hub of music-file piracy.
Going after China's top search engine is a logical move. Even though portals aren't delivering the illegal MP3s, they are profiting from the process of hooking up music fans with piracy sites through search queries.
The record labels have come up empty in previous legal challenges against Baidu but unearthed new hope after a rare legal victory against Yahoo! (Nasdaq: YHOO) in China last year. The labels reinitiated lawsuits against Baidu and Sohu.com's (Nasdaq: SOHU) Sogou earlier this year.
Going the boycott route is a way to pressure sponsors into affecting Chinese search engines in the pocketbook.
Don't expect it to work. Realize what the labels are asking. They are requesting that advertisers refrain from generating leads through a site that generates just less than two-thirds of China's search-engine traffic.
There are plenty of ways for advertisers to get noticed in China. Focus Media (Nasdaq: FMCN) watches over a fleet of more than 100,000 ad-supported flat-panel video monitors. VisionChina Media (Nasdaq: VISN) reaches commuters with its network of broadcasts on buses. AirMedia (Nasdaq: AMCN) delivers ads throughout airports.
They are all growing companies, but it's hard to beat the accountability allure of click-based online advertising. A sponsor would have to be willing to give up a lot to forgo advertising through the online search leader. It can even get worse, once Baidu fans begin boycotting the boycotters.
Ultimately, it's an ironic circus. Web-tracking site Alexa.com claims that just 6% of Baidu's page views are now going to its Chinese music-search portal at mp3.baidu.com. The slice of the pie was a thicker 15% of its overall traffic less than two years ago.
Is Baidu trying to de-emphasize the music searches, growing a lot quicker elsewhere, or is this reflective of a lack of MP3 appetite in general? No matter which answer you choose, music labels seem to have a bigger problem on their hands than simply getting Baidu to shut down its MP3 searches.
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