Didn't Baidu basically win China because they were the only search engine willing to play ball right from the beginning with regards to censorship? It seems that plus the fact that they were homegrown got the playing field tilted pretty heavily in their direction.

in china big companies are usually in close yet undisclosed contact with the govt. it would supprise me if baidu was an exception.

when i was in china i found that all google services where extremely flaky: dropped packets, super long roundtrips, meager throughput and often unreachable for a few minutes. in my opinion they where almost unusable for 'business'.

at the same time websites like slashdot or our beloveth hn were just doing fine. while baidu.com, qq.com, taobao.com (all super popular sites in china) were all blazing fast.

i know i am suggesting something without providing proper proof. but for me it is quite clear what drives the success behind baidu -- its the lousy access the chinese have to the world's leading alternative to it.

just my 2 rupees.

Knowing China intimately and having a family with multiple businesses in the countries has given me an unique understanding of the business world in the country (they own factories in southern china that produce clothing for American companies like armani exchange and RL and are constantly required to deal with the government in regards to labor, customs and etc).

The main reason why every American company will fail in China is because of cultural differences. American companies lack the ability to understand the Chinese mindset and often that leads to misunderstandings that wont be easily forgiven.

American companies that truly want to succeed in China need to readjust their business model. You cant bring an American company to China, you need to invest and develop organically a Chinese company that is substantially owned by an American company so that the citizenry and the state will allow and appreciate its existence.

As for competition among the Chinese companies, it is often the case that developing a relationship with the government is vital. But, developing a relationship or "guanxi" is a very different concept in Asian culture compared to American culture. Giving a "red envelope" is considered a necessary sign of respect and acknowledgment of their status, but in the US its a straight out bribe.

To curry favor with the people is simple, just give lots and lots of free data, products or whatever the people want. Whether that data is copyrighted, patented or otherwise. That's how baidu did it, thats how youku did it and thats how the next big thing is going to do it.

China's next big wave is going to be to develop its own silicon valley of sorts because its very popular to copy American startups and put an Asian spin on the idea to create a NEW multi-billion dollar company.

Irony in the whole setup. Baidu is chinese government controlled company - traded and financed in US markets.

It is surprising to me that these companies which get traded with SEC requirements, yet they are allowed to do whatever it is considered illegal here and still get away with it. It pisses me off that there are no regulations/jurisdiction about such shortcuts companies take. There is gotta be a solution.

Many Asian countries do this and they back companies that are home grown. For example Samsung basically is run by the South Korean government. In China, it is no different, look at all the big companies that were built and raised in China, and they are backed by the government.

Baidu has won China simply because it is a more relevant search engine for China's needs.

Go to http://video.baidu.com/ and search for a TV show you want to watch, you will find the whole episode. With Google video you will get 3 minute clips. Baidu also has an excellent mp3 search. Looking for a movie to watch?

Google has made plenty of mistakes in China. For starters most of Googles documentation is blocked in China thanks to the way China and Google have set the network.