China National telecast CCTV exposed a web promotion for fake medicines in Baidu.com on July 19. It said the police of Wuhan discovered three factories manufacturing fake medicines and selling them across the country, and they also found out Baidu.com, the biggest web search engine of China, had been joining the fake medicines web promotion by key word bid.
When patients search key word such as rheumatism in Baidu.com, they will find several results of web promotion in the first place, which can not be distinguished. The fake medicine manufacturer paid high amount of money to overbid his competitors, making sure that his website would be found in the first place. Each time the web promotion was clicked, he need to pay 12 yuan (about 1.8 US dollar) to Baidu.
How profitable the key word bid is? According to the fake medicine manufacturer Gan, the manufacturing cost for each fake medicine is 31 yuan; the delivery cost is 20 yuan; web promotion cost is 495 yuan, which is the biggest cost of all. To sell each fake medicine, Baidu can earn over 70 per cent of the revenue.
Due to Google quitted China in March, Baidu has become the monopolizer in Chinese web search market. By raising the key word bid price, the second quarter Baidu's operation income is higher than expected.
Baidu's key word bid is notorious. However, Baidu always know how to maintain a heathy relationship with government and media by bribe. In 2009, after CCTV had exposed Baidu's key word bid for the first time, Baidu sponsored CCTV 2009 Spring Festival Gala with 50 million. Then CCTV and other media turned their fire to Google China, forcing it to quit. Now Google is gone, there is only Baidu, and CCTV start targeting Baidu. Maybe it is time for Robin Li, Baidu's CEO, to sponor CCTV again.