What do Plaxico Burress, Amy Winehouse, and Baidu (Nasdaq: BIDU ) have in common?
Give up? Well, none of them can seem to stay out of trouble.
Baidu's latest negative brush with the media stems from striking workers in southern China. Hundreds of Baidu's sales staff went on strike last week, as reported by London's Financial Times yesterday, protesting a sharp reduction in base pay.
"There are only two possible explanations for the wage cut," explains the article. "Either demand for online marketing is much less rosy than expected, or local executives in southern China are bad managers. Neither is reassuring."
Ouch! What's next, Baidu? Punching out a photographer, having a handgun go off in a crowded nightclub, or heading back to rehab? Well I say no, no, no.
Financial Times isn't being fair. When Microsoft (Nasdaq: MSFT ) sacked 5,000 hires earlier this year, did that make Mr. Softy a bad actor? When Google (Nasdaq: GOOG ) scaled back on its gourmet cafeteria and day-care benefits -- which many interpret as a salary slice -- no one suggested that a more cost-conscious Google was incompetent.
Unfortunately, that's the price that Baidu has to pay as the bad boy of online search. There have been too many slip-ups over the past year. Between unlicensed medical advertisers, litigant record labels, and an advertiser's lawsuit, it was really only a matter of time before its own hires turned on the company.
The media is going to eat this up, because it loves to take the top dogs down a peg or two. Baidu is the market leader, by far, in China. Google is a distant second, while others like Yahoo! (Nasdaq: YHOO ) and Sohu.com's (Nasdaq: SOHU ) Sogou are specks in the rearview mirror.
This doesn't mean that Baidu doesn't deserve the lashings. It can use a date with Mr. Bubble in a tub full of water. However, it also means that analysts and journalists assume the worst, and that's not always appropriate.
I couldn't disagree more with the "only two possible explanations" the Financial Times presents its readers. My theory is that the company has been cleaning up its operations and is being refreshingly vigilant in sponsor claims. This is the kind of review that makes its staff more accountable, so it's logical to adjust the base salary to widen the rift between its productive sellers and its laggards.
Want an even better explanation? Where is the harm in suggesting that maybe a review of cost-saving initiatives found that Baidu could afford to lower its base salary? As cuts at all three of the stateside search engine leaders prove, you can be productive and cost-conscious.
Still, it wouldn't hurt to keep your nose clean, Baidu. Give them less to talk about. The paparazzi are always watching.
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