Not many Chinese brands -- aside from state-owned behemoths like PetroChina -- have much international profile, and certainly no recognizable human face at the top. Coming off a round of recent interviews in Beijing with Bloomberg, Forbes, and the Wall Street Journal, perhaps Baidu's 41-year-old CEO Robin Li is trying to change that. Or at least, taking a cue from Steve Jobs' example, he's trying to cultivate a better and more direct relationship with the (foreign) media, which is itself an unusual step in China. One possible reason: Baidu is now looking to expand operations overseas.
Li is obviously in an extremely interesting and difficult position. After graduate school in New York and some time working in Silicon Valley, he went home to China to co-found, in 2000, what is now China's leading search-engine company. The billionaire Internet entrepreneur is said to have very cosmopolitan instincts in some regards, but has made the calculation that business in China requires being utterly apolitical -- in other words, doing what the government requires you to do.
In most authoritarian countries, Internet censorship means keeping information out. But in China, the government also requires the proactive compliance of Internet companies in keeping track of certain information about users, popular search terms, and more. Indeed, that kind of compliance is fairly costly, as Li told Bloomberg TV on Thursday: "We have to spend a lot of resources to make sure our content and services abide by Chinese law, and [Internet companies based outside China] don't." In analyzing his remarks, Forbes' Gady Epstein makes the point: "He raises the issue of self-monitoring in an interesting context that not a lot of people think about too deeply: the literal financial cost, as opposed to what Google considers the moral cost."
Of course, in another way Baidu is surely feeling lucky. Google's woes in China have been Baidu's gain, and now the company, which was already the market leader in China, commands about 70 percent of the search-advertising market in China, up 6 percentage points in the last quarter. And there's a lot of room to grow. As the WSJ's Owen Fletcher writes after interviewing the Baidu CEO: "With more than two-thirds of China's population not yet Internet users, Mr. Li says search advertising will remain Baidu's main growth driver for five to 15 years."
Yet, for all the focus on search, censorship, and China, many interesting questions still aren't being asked. In the search market, Baidu looks poised to continue to grow, to cooperate with the government, and to make money -- the only questions are: how much, and how fast? But beyond search, the future is more up for grabs: Will Baidu, like Google, expand quickly from a company focused mostly on search to one with a host of related businesses, from video to mobile? Dow Jones reports that Li says he's "increasingly keen" on making strategic acquisitions and alliances, including internationally. (This year Li made his first appearence at the annual Allen & Co. confab of media and tech moguls in Sun Valley, Idaho.) Meanwhile Baidu is now making plays in the mobile market in China. Next up, says Li, is expanding Baidu's global operations. As he told WSJ:
I think that five to 10 years down the road we'll have a very meaningful part of our revenue come from international expansion. Right now, we only have one other language, which is Japanese, but moving forward we would launch a lot more other languages ... the U.S. you already have very strong search-engine players—Google, Microsoft, etc. I think we would be cautious entering that market. So for our international expansion we will probably avoid the U.S. for the time being."
What's on the drawing board next? Baidu pushing into Southeast Asia? Into other authoritarian countries (given its track record toeing the unfree line)? One thing is certain: Much will come down to Li's own instincts, connections, and future vision. In his own words:
I don't run the company based on investor expectations. I run the company based on our own vision of the future of Internet computing and the future of the Chinese market. I'm the founder of the company. I will stay here for a very long time. I don't need to please those short-term investors for next quarter. I need to make sure the company is healthy and strong and will continue to grow for many, many years."
Granted, Li's vision of the future and implicit partnership with Beijing is a far cry from the utopian-leanings of Silicon Valley start-ups, but it will be interesting to watch unfold. While Baidu looks unlikely to be a liberal ideological pioneer in China, it is clearly innovating in other ways, for better and worse. Li, a soft-spoken engineer who often eschews the dark suits favored by most Beijing businessmen for Izods and pastel shirts in the office, is a man to watch.