Baidu Says It's Ready to Take on Google in China

Investors may be worried about the impact Alphabet Inc.’s (GOOGL) Google’s return to online search in China will have on Baidu Inc. (BIDU) but company CEO Robin Li isn’t that concerned.

In a posting on his official WeChat messaging account, which was seen by Bloomberg, Li said Baidu plans to fight Google if it enters the market so that it will “win again” in Internet search.

“We can now, with real knives and real guns, PK them again, win again,” Li wrote, using a term that Bloomberg said means to compete against. “In 2010, when Google withdrew from China, its market share was declining and Baidu’s market share had exceeded 70%.” (See also: Baidu vs. Google: How Are They Different?)

Stock Feels Pressure From Potential Google Entrance

The comments come at a time when Baidu’s stock has been under pressure since The Intercept reported that Google is working on a censorship-friendly mobile search app to get back in the Chinese market. Google hasn’t been operating in China since 2010 after it was banned for not agreeing to China’s censorship rules.

Citing internal Google documents and people familiar with the plans, The Intercept reported that a search engine optimized for China, dubbed Dragonfly, has been in development since spring 2017. Coming on the heels of a meeting between Google CEO Sundar Pichai and a high-ranking Chinesevgovernment official in December, the pace of the project has picked up, noted the report. The search engine would block websites and search terms focused on human rights, religion, protests and democracy, reported The Intercept.

While Google hasn’t confirmed its plans, China’s Communist Party’s People’s Daily newspaper said they welcomed the internet giant’s return, granted it abided by the rules and regulations regarding censorship. That means if the government decided to censor a search result, Google would have to comply. That story by the state media in China was later removed, noted Bloomberg. (See also: Baidu Breaks Down From Support Following Google Revelations.)

The World Has Changed Since Google Left China

The way Li sees it, a lot has changed since Google exited the Chinese market. He called it “earth-shaking changes” in which local Chinese companies are now the leaders. “The world is copying from China. This is something every company wanting to enter the China market must carefully consider and face,” said Li. 

Prior to the Google revelations, Baidu had been getting accolades from investors after posting a strong showing for its second quarter. Revenue in the three months ending in June increased by 32% while the number of online customers increased 9%. Its third-quarter guidance is in line with expectations.

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