Local media is again reporting that a Chinese Internet company — in this case, Alibaba.com — has suspended advertising on Chinese search engine Baidu.com (BIDU).

According to these local media reports, Alibaba reportedly sent a notice to Baidu.com on October 10, 2008 to terminate the search engine advertising contract between the two companies. Alibaba's public relations department is reported by Techweb.com.cn as saying that the termination of advertisements on Baidu.com is based on their lack of effectiveness. According to the customer data analysis, the traffic from Baidu.com has been declining and of these visits, a significant part are invalid visits from unknown sources. At the same time, the visits brought by Baidu.com are not consistent with the demands of small and medium enterprises. Therefore, the company has decided to stop the advertising cooperation with Baidu.

At the end of 2007, Taobao.com, the online e-commerce shopping subsidiary of Alibaba, already stopped placing advertising on Baidu.com and blocked the search engine. According to the information published by Taobao.com, since it blocked the Baidu.com search engine, its traffic has increased by 180% compared with the same period last year and its trade volume increased by 240%. By September 2008, its trade volume in a single month has been over CNY10 billion. This shows perhaps that the search engine advertising via Baidu.com was unnecessary.

Last month the Music Copyright Society of China reportedly sent a letter to electronics giant LG asking it to cease placing advertising on Baidu's MP3 music download channel because of copyright infringement worries. A "Refuse to do advertising on Baidu" activity was jointly launched by the Music Copyright Society of China and the International Federation of the Phonographic Industry in June 2008 and had participation from major music companies, including Universal Music, Warner Music, Linfair Records and Taihe Rye Music. Previous to that, in February 2008, R2G and the Music Copyright Society of China jointly started a fight against Baidu, declaring that they would not negotiate with Baidu in any way before the website stopped its infringing activities. Later, major music copyright agencies, including IFPI, Universal Music, Warner Music and Sony BMG sued Baidu.


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