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Chinese search engine Baidu under investigation for ad placements after student's death

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Profits vs. public interest

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Last month, a 21-year-old college student in China died after trying an experimental cancer therapy from an ad that showed up on China's flagship search engine, Baidu. The company was criticized for unethical search ranking and ad placements. On Monday, following the public outcry, the Chinese government launched an investigation into Baidu's health care ad practices, Quartz reported.

The student in question, Wei Zexi, was a computer science major at Xidian University in northwest China's Shaanxi province. He was diagnosed with a rare form of cancer called synovial sarcoma. After failing to receive successful treatment elsewhere, he turned to Baidu. Through the search engine, Zexi found The Second Hospital of Beijing Armed Police Corps, which claimed to have developed a highly effective experimental treatment in collaboration with Stanford medical school — the claim turned out to be false.

Profit over public interest

The search result for The Second Hospital of Beijing Armed Police Corps was actually an ad, and had been paid for and labeled as such — though it’s unclear if Wei understood that. After the treatment failed, Wei faulted Baidu and took to Chinese Q&A site Zhihu to tout the search giant as "evil." On April 12th, Wei succumbed to his disease and died.

This incident sparked an uproar amongst the country's online population, who threatened to boycott all of Baidu's services — search engines, music streaming, maps, and more. People wanted Baidu to take responsibility for promoting hospitals and treatments that have not been properly vetted. This isn't the first time the domestic search engine has received backlash from the public for hosting false medical information. In January, Baidu faced scrutiny for allowing an unlicensed private hospital to host an online forum on hemophilia. The hospital used the platform to publicize its services and delete comments that challenged its credibility.

Repeated mistakes

Baidu spokeswoman said in a statement to The Wall Street Journal that its made an effort to remedy these problems. According to the spokeswoman, in the past two years the company had rejected 500 million promotional messages it deemed unfit. In the past year and a half, she said, Baidu paid roughly 50 million yuan ($7.6 million) in compensation in response to 2,477 complaints involving people who said they had been defrauded or had their consumer rights violated.

The recent investigation announcement spooked investors, causing the Nasdaq-listed shares to plunge nearly 10 percent. But is that really a cause of concern for the company? If past events are proof, falling shares aren't enough to cause Baidu's downfall. In 2008, a TV show exposé about Baidu's paid listings including unlicensed pharmaceutical companies caused the company's shares to plummet 25 percent in a single day. Yet, Baidu remains the dominant source of information for over 700 million "intranet" users in the country and it controls over 80 percent of China's online space today.

No other options

Following a censorship conflict with Beijing, Google bowed out of the Chinese market in 2001. Due to the strict censorship in the country, Chinese users are cut off from international web sources and they have few domestic alternatives. Local search engines, Qihoo and Sougou, are still too small to compete with Baidu. In the rest of the world, multiple sources can be used to cross-reference search results but in China, the public remains fully reliant on Baidu's results. This makes Baidu more than China's Google — it makes it China's only Google. If that's not reason enough to put public interest above profits, what is?