Alibaba Drops Advertising on Baidu

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Alibaba is no longer advertising with Chinese search engine Baidu, but said that the decision is not linked to the latter's launch this week of an e-commerce site.

"The clicks that Baidu brings do not benefit small and medium businesses," Alibaba said in a statement. The company said that it had ended the advertising for its B2B (business-to-business) site on October 10, and that it had done the same for Taobao, its C2C (consumer-to-consumer) site, late last year. Despite the cessation, Taobao traffic has grown 180 percent over the past year, Alibaba said.

Baidu announced its e-commerce site, called Baidu Youa (loosely translating as "Got It"), on Tuesday. Although billed as a C2C site, the selling is done by Baidu-registered retailers, rather than individuals selling to other individuals that were once the hallmark of both eBay and Taobao.

Baidu's move into e-commerce puts the two Chinese Internet leaders more in each other's face. Taobao is the consumer e-commerce leader, with over 60 percent market share, the same share that Baidu holds in China's search market. Alibaba also owns Yahoo's China operations, which competes in search.

Alibaba did not disclose the value for its ad spend with Baidu.

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