Baidu vs. Google: What’s the Difference?

Baidu vs. Google: an Overview

Google and Baidu are listed on the Nasdaq and operate in similar web services spheres. Despite popular belief, Baidu has a large suite of products and services similar to Google. Both offer search, social, and knowledge products along with location-based products, and music products to name a few.

But the companies are quite different. As Google (GOOGL/GOOG) maintains and expands its stronghold in the global internet search arena, Baidu (BIDU) has the upper hand in China. Here are the key differences between Baidu and Google.

Key Takeaways

• Baidu leads the Chinese internet search market while Google is the undisputed global leader.
• Baidu’s local concentration on China remains a concern from an investor’s perspective, especially due to increasing domestic competition.
• If Google can increase its share in China, it will add significantly to the company’s business and potentially take away from Baidu.
• Baidu holds the bulk of China’s search engine market, producing results in Simplified Chinese.

Baidu

Baidu remains a Chinese company, providing internet search solutions in Chinese to the country’s residents. The company is fully compliant with local laws and censorship, as directed by the state government.

Baidu banks on its comparatively better understanding of the local Chinese language and culture, which enables it to better optimize its search technology to the needs of local users. For instance, the Chinese language is complex, with some words having multiple meanings. Baidu’s search algorithms place a lot of relevance on the context of the words unlike Google, which appears to have struggled on these fronts in China in business and technology.

Baidu is expected to continue its dominance and growth in China, based on its localized offerings in the world’s most populous nation, which still has limited internet penetration.

Business Segments and Financials

Baidu has unique offerings like a missing person search, senior citizen search, and patent search, which are specific to Chinese legal requirements. It reported 676 million monthly active users (MAU) as of March 2024.

The company has two segments:

• Baidu Core, which involves keyword-based marketing and includes artificial intelligence (AI) products and services
• iQIYI, which offers online advertising

Baidu Core is the company’s largest revenue driver, bringing in more than 70% of the company’s earnings. Within this segment exists the mobile platform, which features the Baidu App—China’s top search-plus-fee app—its AI cloud, and other growth initiatives.

The company reports its financials in the local currency, the Chinese renminbi (RMB). In the 2023 fiscal year, Baidu reported:

• Total revenue of RMB 134.59 billion, which was a 9% increase from the RMB 123.67 billion reported for 2022
• Operating income of RMB 21.85 billion, which was a 37% jump from the RMB 15.91 billion earned in 2022
• Net income of RMB 20.31 billion, which was an increase of 169% from the RMB 7.56 billion reported in 2022

Important

Baidu and Google both generate revenue primarily through online advertising, but Google’s diversification is higher compared to Baidu and continues to increase.

Google

Google has had a few rough patches with the Chinese authorities over freedom of speech and free access to information. While Google continues to operate in China, its capacity is limited in the country. But what it lacks in the Chinese marketplace, it makes up for globally. It is the go-to search engine for most people around the world.

But, it also has other products and services that consumers use every day, including email server Gmail, and Google Drive—its file storage service. People can get tailored headlines on Google News and host meetings on its video conferencing service called Google Meet. Its timely bet on buying the mobile operating system Android gives it a head start in the global mobile search market. It now contributes to increasing proportions of Google’s revenues.

Google is the largest company owned by Alphabet, which is a technology conglomerate. The parent company replaced Google as the public company in 2015 but continues to trade under the old ticker symbols on the Nasdaq.

Business Segments and Financials

Google may not have a leg-up in China, but it is a dominant force in the rest of the world. It continues to diversify its products and offerings to expand its business in developed markets.

The company’s primary business lines include:

• Google AdWords and Advertising: This business line is Google’s proprietary ad service and is a major revenue driver.
• Google AdSense: AdSense allows any type of business to advertise across different Google platforms, including Gmail and YouTube.
• Google Fiber: Google’s broadband service, which was launched in 2010.
• Google Nest: Google acquired Nest Labs in 2014. It produces smart thermostats and safety devices like smoke detectors.
• Verily Life Sciences: This segment focuses on life science and health-related products. The goal is to find global health solutions

For the 2023 fiscal year, Google’s parent company Alphabet reported:

• Revenue of $307.39 billion, which is a 9% increase from the $282.83 billion reported in 2022
• Operating income of $84.29 billion, which is a 27% jump from the $74.84 billion reported in 2022
• Net income of $73.79 billion compared to $59.97 billion from 2022

Special Considerations

Baidu increased its focus on using artificial intelligence (AI) to better its processes and the lives of its customers. In particular, the company plans to use it to transform the transportation industry through the use of robotaxis and driverless cars, to detect viruses and advance research in vaccines, and create digital and virtual human-like machines for the services industry.

Google is expanding its AI focus in the healthcare sector, improving screening for diseases, such as tuberculosis. It is also using AI to help diagnose dermatological issues. It also announced the release of AI flood forecasting and AI shopping tools for the 2024 holiday season.

In February 2021, Baidu launched a multi-modal autonomous driving platform to enable AI-powered transportation: Apollo Robotaxis, Robobuses, and other self-driving vehicles. Launching first in Guangzhou, a city north of Hong Kong, customers will be able to request transportation services on demand. In November 2024, Baidu won a license to test self-driving cars in Hong Kong, making it the first company to be able to do so in the region.

Creating autonomous cars is not a novel concept for Google, which began its quest in 2009. It continues to improve the technology that powers its self-driving cars. In June 2021, Waymo, a subsidiary of Alphabet, secured $2.5 billion in an investment round. The company launched its autonomous cars in a ride-share program in Phoenix, Arizona, and hopes, with its significant capital injections, to make these available to consumers for personal use.

What Is Baidu Known For?

Baidu is China’s largest and most widely used search engine, much like Google in the U.S. Baidu works outside of China but was created for users in China. Users can register and use the search engine, but it will return results in Simplified Chinese.

Is There an English Version of Baidu?

Baidu introduced an English site for developers, but the search engine is not available in English. Users can search using English words, but the results produced will return with Simplified Chinese words.

How Can I Invest in Google?

You can invest in Google by purchasing shares of its parent company Alphabet. Share classes are divided between its Class A shares, which come with voting rights (GOOGL), and its Class C shares, which have none (GOOG). You can also invest indirectly in the company by purchasing shares of mutual funds or exchange-traded funds (ETFs) that have Alphabet in their portfolios.

Can I Invest in Baidu?

Yes, you can invest in Baidu. The company’s stock trades on the Nasdaq so you can purchase shares directly in the company through your brokerage firm. You can also invest in the company by purchasing shares in mutual funds and ETFs that hold Baidu in their portfolios.

Who Are Google’s Top Shareholders?

The top shareholders of Google’s parent company Alphabet include the company’s co-founders Larry Page and Sergey Brin, and institutional holders Vanguard and Blackrock.

The Bottom Line

Google has a strong, dominant presence in most countries, except for China, where Baidu is the largest search engine service. In China, Google accounts for around 2% of the market share, primarily because the Chinese government has restricted its use. Baidu, commanding over 50% of the market, continues to introduce new products and services to its users to maintain its lead in the Chinese marketplace. For now, it caters to Chinese users, and time will tell if it plans to expand its global footprint.