China web giant Baidu apologises after media lashing

SHANGHAI: China's top search engine Baidu has apologised on state television following a barrage of criticism by official media this week over allegedly fraudulent advertisements.

The state-run China Central Television (CCTV) earlier this week claimed users of the Nasdaq-listed Baidu were losing money on phoney airline tickets allegedly sold by advertisers on the search engine, among other charges.

CCTV's business channel also aired footage of an undercover journalist receiving coaching from a man who appeared to be a Baidu staff member, on how to get approval for pharmaceutical ads using fake documents.

In a live broadcast late Thursday, Wang Zhan, a vice president of sales for Baidu -- which accounts for more than three quarters of China's Internet search market -- apologised "to users affected by the fraudulent information."

"We are reviewing our sales and approval process to try to plug loopholes as soon as possible," he added in comments reported by newspapers Friday.

This is the second time that Baidu has come in for strong media criticism, after state television blasted its advertising practices in 2008, forcing it to revamp part of its business.

At the time, CCTV criticised Baidu for allowing advertisers to pay for space alongside top search results, without labelling it as an ad.

Analysts say the latest round of criticism could have a hidden agenda, such as government worries over the company's near-monopoly on Internet search in China, or attempts by competitors to take away its market share.

During the television broadcast, Wang pledged Baidu would make more efforts to filter information that was illegal.

When asked if the company would change its business model, he replied the Internet environment was "indeed complex" and Baidu would use technology and staff to eliminate fraudulent information.

Baidu shares dropped 6.7 percent on Thursday, bringing total losses so far this week to more than 14 percent.

The firm's major rival remains global Internet giant Google, which partially moved out of the Chinese market last year amid a public spat with Beijing over censorship.

However, it also has a number of Chinese competitors, including new search engines backed by state media giants like Communist Party mouthpiece the People's Daily and the Xinhua news agency.

Copyright AFP (Agence France-Presse), 2011