Analysts attributed the 7 percent price jump of Baidu ($593) versus the 4 percent drop of Google ($556) in early trading on the NASDAQ stock exchange to increased fears that Google may shut down its Chinese-language website and leave Baidu without competition in the largest Internet domain in world.
Google is involved in a simmering dispute with Chinese authorities over their demand to censor politically sensitive information on Google’s Chinese website and the unwillingness of the company to do so. Google's Chinese website has been hacked vigorously. Google claims the attacks originated from Chinese government-controlled Internet entities; Chinese authorities reject the accusations.
It has been reported that the driving force behind Google’s principled position against Internet censorship is Google’s co-founder, Soviet-born Sergei Brin, who has expressed his willingness to sacrifice the largest segment of the Internet market rather than acquiesce to further censoring.
Brin spent only the first six years of his life in the Soviet Union but has said that those years had a profound impact on his character, specifically on the significance he attaches to freedom of expression.
Baidu's "eclipsing" of Google’s share price is merely a psychological victory, but it does hint at investors' increasing concern over Google’s uncertain future in China.
With a market capitalization of $178 billion, Google dwarfs the $20 billion Baidu, and its dominance as the world's search engine of choice is clearly established in most of the world except China.
In China, Baidu controls 58 percent of Internet search revenues, compared to 36 percent for Google.
-- Nikola Krastev