The world is filled with millionaires who saw an industry just as it was about to take off and decided to get in on the ground floor. But it takes a true visionary to see an industry on the decline and turn it into a multi-billion-dollar Goliath that dominates the space in the most populous country in the world. That’s exactly what Robin Li, co-founder of China’s internet giant Baidu has done. Since launching Baidu in 2000, Li has been ranked as one of the 10 wealthiest men in China with a personal net worth of just under $14 Billion.
Seizing Opportunity at the Right Time
Robin Li was born in 1968 in the small town of Yang Quan, located southwest of Beijing. His parents were factory workers and he grew up in a very modest lifestyle. After graduating high school, Li enrolled at the University of Beijing where he studied computer science. He then went to the United States where he earned a masters degree at the State University of New York at Buffalo. It would be there in the U.S. where Li would gain the expertise required to flourish back in his homeland.
Li found work as an engineer at the search engine company Infoseek in 1996. At the time, search engines were on a downward turn and some of the major parent companies (including Infoseek’s parent company Disney) were looking to get out of the business. But Li never lost faith in the potential he saw in the power of information. John Wu, the former head of Yahoo’s search engine team, recounted meeting Li in a 2006 interview with the Taipei Times.
“The people at Yahoo didn’t think search was all that important, and so neither did I,” Wu said. “But Robin seemed very determined to stick with it. And you have to admire what he accomplished.”
The Birth of an Internet Giant
That accomplishment was the creation of the largest internet company in China. Alongside his business partner Eric Xu, Li launched Baidu, which roughly translates as “countless searches”, a term derived from a poem about searching for one’s destiny. Li and Xu believed there was great potential in the growing number of online users in China.
That gamble paid off handsomely. According to a 2009 Forbes article, “When Baidu went public in 2005 with $13.4 million in annual revenue, it achieved the biggest first-day jump of the decade on Nasdaq, ending at more than four times its offering price of $27 a share.” It currently trades at $191.80 U.S. and generates annual revenue of 70.55 billion CNY annually.
“A lot of Chinese people have wondered if knowledge really means power in today’s market economy,” Li told Forbes. “I think I’ve proven that it does.”
Today, Baidu is China‘s leading search engine, edging out Google and rival Chinese companies. At one point, Baidu held more than 70% of all Chinese internet search traffic. That number has declined a bit but as of 2014, the company controlled more than 56%. A key part of their strategy is playing up the homegrown angle, emphasizing the success of a native Chinese internet company over its foreign rivals, as seen by a video ad in which a Chinese man humiliates a dolt Caucasian man who claims to understand China whilst speaking poor Chinese, with the tagline “Baidu Understands Chinese Better.”
With Success Comes Controversy
Over the years Baidu has received its share of criticism for some of its business practices. Many have pointed a critical finger at the company for co-operating with the Chinese government in censorship practices. According to a 2009 report in the China Digital Times, internal company information was leaked that contained “a set of working documents from Baidu’s internal monitoring and censorship department, with details including staff names, their performance records, company contact lists, censorship guidelines, operating instructions, and specific lists of topics and words to be censored and blocked, guidelines of how to search information which needs to be banned, the backend URL, and other internal company information from November 2008 through March 2009.”
In later years the company was accused of ethically questionable practices including exchanging prime search placements for certain medical companies for a fee. The most infamous incident came when 21-year-old Wei Zexi paid for a cancer treatment he found highly ranked on Baidu’s search engine. The treatment proved unsuccessful and Zexi posted a highly critical message saying Baidu is putting profits above people’s health by promoting questionable medical practices. It has been reported that ads from medical companies make up 30% of Baidu’s total ad revenue. The incident has spurred a regulatory investigation which is still ongoing.
Here Comes Baidu
Despite the controversies, the future looks stronger for Baidu as they look to branch out into different technologies. Earlier this year the company announced Project Apollo in which it will release all of its autonomous car technology to automobile manufacturers in the hope of delivering the first commercial self-driving car by 2020, challenging Google and Tesla to follow suit.
The company has also emerged as one of the leaders of Artificial Intelligence in the world, investing billions of dollars and 1,300 people in deep learning technologies, out-innovating global rivals. In fact, when Microsoft researchers declared in 2016 that they had created software capable of matching human skills in understanding speech, Baidu‘s lead AI researcher poked fun in a tweet, “We had surpassed human-level Chinese recognition in 2015; happy to see Microsoft also get there for English less than a year later.”
Although time will tell whether the company‘s massive investments in emerging technologies will pay off, few are likely to bet against the Chinese Internet giant and its trailblazing founder. “The era of mobile internet has ended,” said Li in a March 10 interview. “We’re going to aggressively invest in AI, and I think it’s going to benefit a lot of people and transform industry after industry.”