Sure, Microsoft's Bing will power the searches on Taobao's new Etao shopping search engine. So what?
For one thing, Taobao's parent -- Alibaba -- loves to play the field. Yahoo!
Second -- and more material for Baidu's purposes -- Etao has an uphill battle if it wants to become more than a fringe shopping-based search site.
It's been several months since Google's
Online giants diversify, but they don't necessarily dominate new realms. Baidu rolled out a competing consumer-to-consumer platform to take on Taobao two years ago. If you haven't heard a lot about it, that would be because search remains the real driver at Baidu -- just as B2B and C2C e-commerce will remain Alibaba's calling card. Taobao is a such a marketplace champ that it chased eBay
Striking a deal with Taobao is still a good move for Baidu. It will help grow awareness of Bing's brand in the world's most populous country. If Yahoo! decides to sell its 40% stake back to Alibaba -- as many speculate will happen -- Microsoft can become Alibaba's Western search partner. In a country that favors local darlings, it's a better path for Microsoft to take than simply going in alone.
Microsoft's search site needs realistic goals for its involvement in China -- rather than the delusion of unseating Baidu when it can't even take care of business closer to home. As long as it keeps its expectations level, Bing is on the right track to generate incremental revenue for an online division that's previously been a profit-sucking abyss.
If you were Bing, what would you do to catch up to Baidu? Is it even possible? Let us know your thoughts in the comment box below.
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Longtime Fool contributor Rick Munarriz has been a fan of China's growth stocks for several years now, even though he does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.