Baidu, often referred to as the “Google of China” by American pundits, has seen its market dominance in its home market challenged recently. While the firm had dominated Chinese search since Google Inc’s (NASDAQ:GOOG) 2010 exit.
However, as smartphone growth has exploded in the Middle Kingdom, a significant chunk of the search market has gone mobile, not necessarily to the benefit of Baidu.
The emergence of mobile search has opened the door to new competition; in particular, relative newcomer Qihoo 360 (QIHU) has grabbed 10% of market share.
While Baidu’s 60% share of search remains impressive, these numbers represent a year-over-year decline; as well, as others had prognosticated, the company has been forced to drastically increase its spending in an attempt to fortify its mobile search position.