In a report published in early March, the ranking of the wealthiest businessmen in the world Forbes state Robin Lee, 47-year-old founder of the largest Chinese Internet search engine Baidu, was $11 billion (according to the counter Forbes “in real time”, now it is $13.4 billion). This is the fourth in China and 90th in the world, and Baidu, along with the online trading platform Alibaba and telecommunications company Tencent, is one of the recognized flagships of the Chinese Internet business.
The native of a rather poor family, I was able to get an education abroad, along with Larry page and Sergey Brin to come up with one of the first modern algorithms of Internet search, and when the invention was not claimed by his American employers to build on the Internet searching multi-billion dollar business in the homeland.
In America for prospects
If Yangon, the future founder of the “Chinese Google”, Baidu is often called, was born in 1968 in Yangquan city, 300 km southwest of Beijing. English name Robin, he began to use much later, when I moved to study in the USA.
The Li family was not rich — my parents worked in a factory and fed five children, of whom the future billionaire was the fourth. As a child Lee was fascinated by programming, participated in competitions at the school level. In 1987 I was able to enter the faculty of library science in the best University of the country — Peking University. Second specialty in University was computer science.
During the historical events on the square Tiananmen in 1989, when the forces disperse a student demonstration killing hundreds of people, Whether studied in the second year. Now, Recalling this, he says, “then was apolitical”. But the next year, according to him, began to think about how to continue their education abroad, since China seemed to him completely futile.
After graduating from University in 1991, Lee aims to leave the United States to continue my education in the IT field. It was not easy — Informatics in Chinese universities was weak, so out of 20 applications to U.S. universities, which, by his own admission, sent blindly, was adopted only one, in not the most prestigious University of the state of new York in Buffalo. After receiving a master’s degree in 1994, Li joined IDD company, specializing in databases of financial information and software for its processing. Three years later, the IDD was bought DowJones&Co, and Lee managed to take part in including in the development of software for the online version of The Wall Street Journal.
The mid-1990s was a time of rapid development of the Internet, but the industry was in its infancy — the number of registered domain names in 1995 amounted to 177 thousand (there are about 300 million). But even then, the problem of searching the web and sort the results of this search was a major in the industry. Whether actively engaged in this issue and in 1996, creates and patents a search method of “link analysis” (link analysis), which was the ranking of sites in search results based on the number of hyperlinks to this website on other pages. Using this algorithm, in 1996, Lee creates for the company the first IDD your search — RankDex. Similar in principle to the mechanism at the same time created the Stanford students Sergey Brin and Lawrence page for the search engine BackRub, the predecessor Google. Paige in the application for the patent of Google PageRank algorithm mentioned as RankDex search engine already uses an algorithm close to Google’s search algorithm.
In IDD reacted to the invention Whether the search algorithm without much enthusiasm. “My boss was not impressed with what I created,” recalled the businessman in conversation with The New York Times. Soon, he becomes specialized in the search company Infoseek, which first started selling Internet advertising on a “CPM”. It seemed that there will be able to realize their ideas of search algorithms, but in 1999 bought Infoseek, The Walt Disney Company decided to reorient the company from search to content creation, and the programmer had to find a new place.
Robin Lee in numbers
$13.5 billion — the state Robin Lee on April 13
$64,85 billion — capitalization of Baidu on Nasdaq
20,8% — share of Baidu Robin Li in
$5 billion — the net profit of the company for the year 2015
79,81% — share of Baidu in the market of Internet search in China
7,52% — share of Baidu in the global market of Internet search
46 thousand — so many employees working in Baidu
92.1% of the share of Chinese audience
629 million — the number of active users Baidu per month
Sources: company data, Nasdaq, China Internet Watch
The first business
Still working at Infoseek, Robin Li met another native of China, Eric Xu, a biochemist by training, who had extensive ties to Silicon valley. Xu introduced the co-founder of the flagship IT business the time, of Yahoo, Jerry Yang, and John Woo, in which Yahoo led the unit involved in the development of the search directions. As Wu recalled, in conversation with The New York Times, then IT circles skeptical of the prospects of search engines like business. “The same thought myself, but Robin was firmly given to understand that it will continue work in this area,” recalled Wu.
In 1999, Lee and Xu was able to attract from two venture capital funds from Silicon valley — Integrity Partners and Peninsula Capital — $1.2 million, which returned to China and founded Baidu. Company name literally translates from Chinese as “hundreds of times”. According to Lee, it refers to the line from the Chinese poem of the song dynasty, which referred to “the ongoing pursuit of ideal”. A year later, two other venture capital firms from USA — Draper Fisher Jurvetson and IDG Technology Ventures — invested $10 million the First headquarters of the future Internet giant was room in the Beijing hotel overlooking the campus.
Baidu started with building search engines for a major Chinese websites — Sina and Sohu. In the early 2000s many, including members of the Board of Directors of Baidu, it seemed that to build a successful business on one search impossible, and creating your own website will only deprive the company of potential customers. But, impressed by the success of the American company Overture, which then began selling advertisements associated with search queries of the user, persuade partners and investors to develop individual site Baidu.
The site was launched in 2001, and the minimalistic design of its home page, which was nothing but the search string, immediately sparked comparisons with Google. Lee was one of the first in the industry, who found ways to further commercialization of the project Baidu began selling companies a higher position in the search results and charge them money for every click on these ads. The business model was justified. In 2004, Baidu becomes profitable, and already in 2005 made public. Baidu IPOs took place on Nasdaq. The placement price of $27 per share by the end of the first day of trading rose fourfold to $122, and a company with revenues of only $8 million received capitalization of about $4 billion.
“A company without morals”
“Baidu, at least in the eyes of the competitors, is not “moral” companies,” wrote Bloomberg in 2010. By that time the company has been involved in several scandals and was regularly subject to accusations of filtering information and copyright infringement.
One of the main reasons that causes competitors to claim that Baidu is “foul play”, and it was a struggle for the Chinese market between Baidu and Google, which the latter ultimately lost. Google came to China in 2006 and in a short time could make Baidu a significant challenge. Lee has launched an advertising campaign that convinced that the Chinese company better satisfy the needs of Chinese users. But the market share of Baidu fell: in 2005, she almost single-handedly controlled the Chinese market, and in 2009 the share of Baidu, according to iResearch, decreased to 60%, while the share of Google was 33%. Then, to help Lee come the Chinese authorities.
Back in 2006, when Google came into the Chinese market, he concluded with the authorities of the PRC an agreement under which pledged to filter search results. Filtration was subjected to including the materials covering the crackdown at Tiananmen square, the movement for the independence of Tibet and Xinjiang Uygur Autonomous region. But soon after in late 2009, Google mail server was attacked by Chinese hackers (which is traditionally associated with the authorities of the PRC), the company took the decision to abandon censorship and as a result was forced to actually withdraw from the Chinese market: by 2012 the share of Google fell to 1.7%.
Whether in an interview says that the withdrawal of Google from China did not affect the leading position of his company. “It is a wrong understanding. I’ve heard many times (that the success of Baidu is associated with the departure of Google), and I don’t attach any importance to this, because it’s not true,” the businessman said in February in an interview with the Central television of China.
Another reason for criticism of Baidu — the charges of music piracy: search by songs MP3 Baidu provides links to pirated files from third-party sites, and music search is a significant part of Baidu’s traffic. Against the search engine repeatedly filed lawsuits major music labels, including Universal Music, Sony BMG and Warner Music.
Accused and Whether that Baidu adjusts under the advertiser’s advertising link, but normal search results, lowering and even eliminating from the search results, companies that reduced the cost of advertising in Baidu. In November 2008, the Central television of China issued a series of investigations in which the authors accused Baidu that she advertises medical facilities lacking the necessary license. In 2008, Baidu was accused that the company has received from milk producer Sanlu money that the SERP was no data scandal discovered in Sanlu milk harmful substance melamine. The scandal brought down the company’s shares and led to massive layoffs. Despite this, Lee emphasizes that “within the company built the Great Chinese wall between search and advertising units.”
“Sooner or later you will see the Chinese company to become a truly global player, and I think Baidu has a chance to become one of these companies. We must be ready to compete at the world level”, — said the publication BusinessWeek. While not too successful in this area. On a set of services Baidu diversified almost more than Google, for example, it includes an online encyclopedia Baidu Know (similar to Wikipedia), the service of legal music Baidu Music, online platform for communication Tieba. But the share of Chinese users in the overall structure of the audience remains above 90%, and its share in the global market search — 7,52%.
In recent months, in an interview, Lee admits he is keen to find new areas for company development, beyond the traditional Internet search. According to the businessman, the future of Internet business to develop the services in the field of O2O (online-to-offline), which attract the online customers to offline services. Speaking in the fall of 2015 at the annual conference of Baidu in Beijing, Li almost did not mention the search direction, the main part of his speech dedicating O2O: “we are changing the company’s mission: she used to connect people and information, is now connecting people and services”.
Lee admits that the gradual withdrawal of the company from an Internet search as a key element of business will affect the share price of Baidu on Nasdaq. If the vision of the company’s prospects in Lee and Western shareholders will diverge dramatically, the businessman made a delisting from the Nasdaq Baidu and accommodation in China — the place where, according to Lee, the next coming of the Internet boom.