Fast 50 2008: Baidu

Few startups dare to go up against Google. But in China, search engine Baidu did, and it’s won the first round.

Why? Baidu performs better in the Mandarin language and has more customized interactive features for local users. Even though Google recently redid its Chinese site, Baidu’s market share climbed to 60 percent in 2007, up from 47 percent the year before. Baidu is China’s most popular web site and ranks in the top ten globally.

Credit goes to Baidu’s soft-spoken Chinese co-founder Robin Li, 39, now a multimillionaire from a 2005 Nasdaq listing. His winning streak continued last year as the stock price passed $400, with revenues hitting $239 million. Though Li fumbled with his first three search startups in China, he got the formula right in 2002 when he copied Google by relying on paid search–then an unproven business model.

“Robin has a very good strategic vision, he sees things others don’t,” says Eric Xu, Li’s co-founder, today an angel investor.

The Chinese-born and American-trained Li is convinced that Baidu will someday “become bigger than Google.” If Baidu towers over Google not just in China but worldwide, it will be due partly to China’s large and expanding Internet population of 210 million–second only to the U.S.–but also to Li’s risk-taking and imaginative nature. To wit, he recently launched a Japanese search engine, introduced search for brand name ads and ad-supported music streaming, and beat Google to searches on mobile phones in China. His new innovative products span to Post Bar, for users to exchange queries and answers on message boards, and Baidu Knows, where individuals can collect virtual points for giving the best answers. In 2008, Li plans to enter the Chinese consumer e-commerce market in a duel with Jack Ma of Alibaba fame.FCS