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Robin Li

The founder of the second biggest search engine in the world has profited from Google's withdrawal from China, but also from adapting his search engine, Baidu, to the particularities of the Chinese consumer.

Robin Li is the unassuming man who beat out Google to dominate the world’s fastest-growing Internet market, with over 540 million regular users, by building a search engine with a distinctly Chinese character. In the thirteen years since founding Baidu, Li has turned the company into the largest Chinese search engine, with an astounding 80% market share by search query, and the second most popular search engine in the world behind Google. With Baidu, Li wasn’t so much in the right place at the right time but rather the world finally caught up with the man with a life-long passion for online search engines.

The young entrepreneur’s success has thrust him to hero status among a new generation of ambitious Chinese youngsters for doing what no other Internet company has thus far been able to do: clobbering multinational giants Google and Yahoo. Meanwhile, Li has attracted considerable condemnation internationally for the company’s cooperation with China’s government censors.

Conquering the Chinese market

The world’s most populous market has always proven difficult for Western Internet firms to infiltrate. Companies such as eBay, Yahoo and Microsoft’s MSN messaging service have never managed to gained significant traction in the China market, failing to take the No. 1 market share position in any category. Meanwhile, homegrown rivals such as Renren, the ‘Chinese Facebook’, Alibaba.com, Sohu.com and Tencent have thrived in this intricately regulated market highly prone to particular consumer tastes.

In May 2010, Google announced its partial pullout from the Chinese market, automatically redirecting queries to its Hong Kong services. When the company made its decision public, it had been threatening to leave the Chinese market for months over cyber-attacks and legally required self-censorship, saying that its independence was non-negotiable. The government lambasted Google, saying that it had broken promises made when the company arrived in China in 2006 and attempted to impose its own value setting.

Critics say that in exchange for freely letting censors oversee Baidu, the company has secured crucial support from the Chinese government, which imposes strict rules and censorship on other foreign Internet companies and has a knack for clobbering American Internet giants.  But regulatory obstacles are only one part of the equation.

Foreign Internet companies have consistently failed to recognize and cater to the particularities of consumer tastes in the Chinese market. Baidu has built up an impressive array of services catered to the local market, offering a search engine for websites, audio files, and images, 57 search and community services including Baidu Baike, an online collaboratively built encyclopedia, and a searchable, keyword-based discussion forum.

A life-long passion

Li has been fascinated with search engines and the indexing of information long before it became the major industry that it is today. At Beijing University, the country’s most prestigious school, he majored in library science, dabbling in computer science on the side. With China still on the cusp of its economic takeoff, Li left for the United States in search of greener pastures. The story of his professional life in the US is largely one of him pursuing this passion with little interest from his employers.

In 1994, Li was recruited at IDD Information Services, a New Jersey division of Dow Jones and Company, where he worked on improving algorithms for search engines when not busy developing the new Web Platform for the Wall Street Journal. A personal breakthrough came in 1996, when he developed a search method he dubbed “link analysis,” (Rankdex site-scoring algorithm) which ranked the popularity of a site based on how many others had linked to it. His bosses weren’t impressed yet executives at the search company Infoseek quickly scooped Li up.

Ironically, shortly after he was recruited at the search engine Infoseek, the company’s parent, the Walt Disney Company, quickly changed strategic direction for the subsidiary, shifting towards content creation. Mr. Li was disappointed, but not discouraged. Former head of Yahoo’s search engine team John Wu remembers meeting Li in the summer of 1998, saying, “Yahoo didn’t think search was all that important… but Robin, he seemed very determined to stick with it. And you have to admire what he accomplished.”

It was this final turn of events that pushed Li to form his own Internet company with Eric Xu, who had a Ph.D. in biochemistry and good contacts in Silicon Valley. Only five years later, 2005, Baidu completed its IPO on NASDAQ and, the following year, became the first Chinese company to be included in the NASDAQ-100 Index. At the beginning of the new millennium, China only had about 9 million Internet users at the time. Today, that number approaches 600 million, making the country the next major Internet battleground. A battle Baidu is likely to win.

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