Sogou has a new method of integrating search results into its Chinese-language input method that has the potential to change the way Chinese users search and change the  way they interact with their computers on a more fundamental level.

As Chinese is written in characters but keyboards tend to use the Latin alphabet, to type anything in Chinese you need software that interprets the phonetic sounds the user types (for example: baidu) into Chinese characters. But many phonetic sounds have multiple possible interpretations, which means that input method software needs to include a graphical user interface (GUI) so that users can choose which baidu they meant. For example, 百度, 拜读, 摆渡, 白都, 败毒 and more could all be typed as baidu.

So Chinese users are used to clicking things from a GUI as they type. Many input methods have incredible predictive text algorithms that make it possible to type long sentences and have the correct characters filled in automatically, but no algorithm is perfect (or knows every proper noun) so some user intervention is always necessary. This is just a part of everyday computing for Chinese users on a more fundamental level than even, say, using a web browser.                                                                    Baidu, Qihoo, and Sogou have been battling for search supremacy mostly within the confines of the web browser, now, Sogou has brought the war to users’ desktops, their word processors, and even competitors’ websites. Sogou’s input method search can display search results  even when  typing in Baidu.com’s search bar. And since users are already in the habit of interacting with and clicking things in the input method software’s GUI, getting them to click on relevant search results isn’t that much of a stretch. If Sogou’s input method search catches on, Baidu and Qihoo may be forced to produce similar offerings. But neither company has nearly as strong a user base for their input method software as Sogou.  Qihoo doesn’t have any input method product at all. By redefining the ground rules, Sogou has put itself in a strong position — if it gets its users to adopt the new “smart” version of its software.

Qihoo’s search market share has leaped up 2% from December 2012 to February 2013 – going from 10.39% to 12.36%. Market leader Baidu dropped by nearly the same amount in the period of time. Elsewhere in the new traffic page views numbers from CNZZ, Google continues its slide down while most of the other rivals are fairly stagnant.

Commercial bruiser, software manufacturer and fledgling search engine, Qihoo has reported $103 million in revenues in 2012 Q4 (up 64% from previous year) to reach $329 million for 2012, almost double the revenue of 2011, with $46.8 million net income. The total monthly active users of Qihoo 360′s products and services reached a record 456 million in December 2012, up from 402 million at the end of 2011. As for its web browser – which is an important traffic driver for its relatively new search engine – the company reported that “monthly active users of Qihoo 360′s browsers reached a record 310 million in December 2012,” up from 255 million the year before. Antivirus apps are another strong area for Qihoo, and it saw mobile users of it’s 360 Mobile Safe rocket from just 53 million in 2011 to 207 million by the end of 2012.

Baidu is currently handling over five billion search queries per day. This figure includes search queries on all of it’s vertical search areas, community sites, Baidu Union partner sites and across all devices. The overwhelming majority of these are from China but there are searches included from over 130 other countries.                                  Google.com’s daily search queries amount to around 3.3 billion per day but doesn’t include Google’s many other domains like Youtube, Gmail, Google Apps, etc.

Baidu is making its cloud developer tools available in English. It will allow broader access to numerous Baidu APIs and services, such as for cloud storage, in-app advertising and analytics, and location-based features.

All the basic information for developers is on the new English site now but Baidu’s director of international communications, Kaiser Kuo, explained that in the coming months Baidu is going to make all the documentation available in English to give app developers outside of China everything they need to distribute apps through Baidu. Baidu has been focusing on mobile so as not to be out-paced by Chinese netizens jumping onto smartphones and tablets with Baidu has seeing an 11-fold increase in mobile searches in the past two years. Baidu says it has 80 million mobile app users, using Baidu Maps or the Dropbox-esque NetDrive app.                                        Baidu’s core products remain only in Chinese, but the company has some interests in Egypt and the Mid-East, some apps in Thailand, its Tieba social forums in Vietnam, a badly loss-making search engine in Japan, and a relatively new research lab in Singapore. That last aspect suggests Baidu might be preparing to take its core search engine into South East Asia in the near future.                                                      Baidu is also pushing its third-party Android market, called the Baidu Mobile App Centre. The Chinese search giant is encouraging global developers to try out its tools and then list their apps in the Mobile App Centre, which launched in mid-2011. Android is hugely popular – much more so than pricey iPhones – but local consumers don’t want to be trapped in the entire Google ecosystem, there are dozens of such third-party Android app stores. Between that store and Baidu’s in-app ad platform, it amounts to an alternative way for global Android developers to monetize from Chinese users, a full-on challenge to Google. One useful thing that developers and site owners might want to check out – once the full resources get translated – is the SiteApp tool which is a great way of making a mobile website pretty easily.

Baidu’s MP3 search has been a popular part of its front-page search options but the company has replaced “MP3″ with “Music”. This minor change is an important one as it is the merging of Baidu’s music-related products into one unified platform, Baidu Music. Separate products like Baidu Ting, Sui Xin Ting, Baidu MP3, Qian Qian and Jing Ting have all been merged into Baidu Music. You can still search for MP3s and other music and services like Sui Xin Ting are still available, they’ve just been folded into the music platform. It’s the sort of thing many users might not even notice if they’re not paying a lot of attention. But it makes Baidu’s music branding efforts easier and expands its catalogue of music (in a way) by putting all the legally available music on its various services into one place.

Mobile Internet and cloud computing are the focus areas of Baidu’s investments. In September 2012, Baidu revamped the design of its homepage to offer users increased access to external websites and applications and unveiled a new mobile-phone platform. Baidu is working on an online travel service with Qunar in which it acquired a majority stake for $306 million in July 2011. Baidu’s new homepage caters for past search requests to automatically display information that may interest users. That may have a “slight negative” impact on sales because users will do fewer searches. Over the long run they hope it will make users spend more time on the site. Baidu moved into vertical channels like e-reading (Fanshu.com), travel booking (Qunar.com), e-commerce (Yougou.com, 360buy.com, tg.com.cn, yaodian100.com), online community (jingtime.com) and housing info portal (anjuke.com). Earlier this year, it struck a deal with Dell to develop tablets and smartphones operating on the Baidu Yi mobile OS. November 2011. Internet adspend reached $2 billion in the third quarter of this year, 22.5% growth over the previous quarter, and up 83.1% year-on-year.

Baidu is the leader in China’s online advertising market with a 28.7% share, followed by Alibaba (15.9%), Sina-Weibo (7.3%), Google China (7.2%), Sohu (4.6%) and Tencent (4.2%).

There could have been cooperation between the two with Taobao’s commodities showing in Sogou’s search engine. One gets the traffic and the other takes the money. However, during the past two years there wasn’t any real collaboration. Sogou wanted a strategic partner but Alibaba wanted to be just an investor. The current valuation of Sogou is far from its target valuation of $ 2 billion. Earlier this year, Baidu offered to acquire Sogou at the price of its target valuation but the offer was rejected. Sogou, as the second most popular search engine, has ambitions of it’s own.

Baidu's income climbed to 1.88 billion yuan in 2011 compared with 1.05 billion yuan for 2010, exceeding their 1.85 billion yuan estimate. Their success lay in boosting investments on services, such as wireless and travel features, to meet competition from rivals Alibaba Group Holding Ltd. and Tencent Holdings. Third-quarter sales jumped to 4.18 billion yuan, from 2.26 billion yuan a year ago. Fourth-quarter revenue also rose by at least 80 percent with advertisers paying more for keywords as sales rose 85 percent in the three months ending September 2011. The fourth quarter is traditionally the high season for online retailers so heavy advertising spending is likely will continue. Revenue is expected to rise to between 4.41 billion yuan and 4.54 billion yuan in the fourth quarter. Revenue is expected to rise to between 4.41 billion yuan and 4.54 billion yuan in the fourth quarter. Baidu stock has climbed 43 percent in 2012.

Sohu just bought back 10.88% of Sogou from Alibaba, a move ending a two-year relationship since Alibaba invested into Sogou in 2010. The valuation of Sogou is now $0.237 billion, an increase of over 70% in 2 years. Their revenue has grown by 184% year on year.

Baidu's business model is to sell its advertising via agencies. It isn’t easy to open a direct account. Baidu has hundreds, if not thousands, of “agencies” but many are not what we would expect in the West, most of Baidu’s agencies are merely “resellers” of Baidu's advertising programs. Paid Search on Baidu: Before opening an account with Baidu, ensure that your website is suitable for a Chinese audience and that the name of the company is clearly displayed. It is also important that the site be translated in Simplified Chinese and in Mandarin. You need to provide Baidu with the following documents in order to open an account but your agency can do for you with a letter authorizing them, if you have one, to manage your account. A copy of your Chinese Business Registration with 'original copy' written in black ink and signed with the company official signature stamp (chop) and copies of all other licenses there may be permitting you to sell certain products and services in China. For example, if you are selling medical products, then you would need to provide a governmental license permitting you to do so. Baidu may request other licenses, including your Internet Content Provider license and you must be prepared for this.

If you don't have a license to operate in China and do not require one (a hotel in the USA as an example), then you need to do the same as a Chinese company but send your local company registration documents with the words original copy signed by an officer of the company in black ink. If you have no Chinese business presence, make sure that information about your overseas company registration is available. If you are intending to use e-commerce, make sure that you can handle Chinese debit and credit cards issued by Union Pay. If not, 95 percent of Chinese users will not be able to purchase anything from you online! Any Chinese licenses for goods or services, if required, must be displayed, as should information about your Chinese business registration. It is crucial that the information on the site reflects exactly the information given to Baidu when opening the account. If it does not, then the site will be rejected! Baidu will determine if you are allowed to sell and advertise in China and will ask for further documentation if there is any doubt. Baidu normally requests a non-refundable deposit of 5,000 RMB plus a 600 RMB set up fee. This is just under $900 U.S. Of course, you can’t send U.S. money unless special circumstances allow it and Baidu does not accept credit cards from foreign accounts. Your agency is likely to provide funding to Baidu on your behalf, but be warned, isn’t entirely uncommon for small Baidu agencies/resellers to run off with your media funds and close their shop. Use a legitimate agency and you should be fine.

Organic Search on Baidu                                                                                   Provided your site is linked to a site in China also provided your site is in Chinese, preferably Simplified Chinese, then it will be spidered by Baidu. In order to be certain that your site is being listed in Baidu, it’s a great idea to host in China behind the Chinese firewall. Although sites outside of China are included in Baidu’s index, this isn’t always assured. For obvious reasons, sites with a .cn domain, which are hosted in China, get a significant boost by Baidu. Baidu takes into consideration all the standard SEO disciplines, including title tag, meta descriptions and links, link content, and body content. On Baidu, links really matter. You can get them in China from directories and other peer reviewed sites. Unfortunately, most social media sites and other popular sites exclude Baidu’s spiders due to the Chinese internet censorship.

All tools provided by Baidu, for both paid and organic search, are in Chinese. However, a number of third-party packages support Baidu analytics, paid search, and other aspects you may wish to get data on. Most businesses believe they can just create a website for Bing China, provided the content will be in English as Baidu incorporates Bing’s results for English searches within their own. However, hardly anyone uses Bing in China for direct searches, so don’t be surprised if very few would ever visit the site from that source!

It would be nice if Baidu had a simple ad console like other search engines, where you can simply upload your keywords, target and price your ads and away you go. Unfortunately, there is a lot of Chinese red tape to get through and risk involved. Utilizing a proper agency would be your best bet, but realise that it does take some time to get started.

In China’s search market, Baidu has long been dominant with an 80% share but with government backed domestic competition and Bing being available, has Baidu retained it’s position ? A report by Enfodesk’s reveals that the search market is growing rapidly, up 62% compared to 2011’s Q2 and 26% up on 2012’s Q1 and Baidu is right on track. The market overall advertising market is now worth more than 7 billion RMB ($1.1 billion) with Baidu taking $873 million or 80%. Bing’s short-term strategy in China is to go after the 5 percent of searches made in English rather than compete with Baidu for searches in Chinese. Dominating these English searches is attractive as it can be assumed that they are made by the wealthier Chinese but those in this market are also likely to have a VPN enabling them to use the uncensored version of Google.

New kid-Qihoo 360 has made a new move in the search engine wars, they have added a Like function on their searches with the aim of providing higher quality search results. They are attempting to build a unique search with the results determined by the users.

Qihoo 360 announced the new domain name for its controversial search engine that was launched in August 2012- www.so.com. The short, easy to remember domain name didn’t come cheap – reportedly US$ millions. When 360 Search launched, they used the awkward so.360.cn and then they changed it a couple of times to 360sou.com and to 360so.com. Sou is the proper pinyin (Anglicized) version of the word “search” in Chinese. 360 Search has captured 11.05 percent of the online search market share in China.

Baidu is rumoured to be focusing more on location-based services (LBS) to develop new revenue streams. Most Baidu searches are local enquiries and so the search engine giant may spin-off its LBS operations as a separate business division to focus on online maps, live traffic information, and local listings under its existing Baidu Shenbian (“Local”) service. The cross-platform Baidu Maps app was recently updated to v4.0, bringing with it live traffic information for several cities, experimental live public bus info for one city, and built-in discount vouchers for some local stores and restaurants. With Apple’s new maps app doing so badly, and users of iOS 6 on iPhones lacking a native Google Maps app, the move comes at a good time but Baidu will have very strong competition from deals sites such as Dianping, from start-ups like Jiepang, Buding and Dingding making listings and coupons apps and from mapping products from other major Chinese web companies, like Tencent’s Soso Maps.                                                                                              Baidu has failed many times in the area of ecommerce. Youa, Baifubao, JV with Rakuten, Leho.com and Shenbian were all unappealing to consumers.