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Google’s China Woes Strengthen Baidu’s Presence

Baidu, Inc. (BIDU) saw some upside from Google Inc.’s (GOOG) woes, after China temporarily barred its citizens from visiting a host of Google properties, including the main search engine, Google Apps, Google Reader and Gmail for 24-hours.

Baidu, Inc. [[BIDU]], the leading Chinese internet search provider, saw its shares jump nearly 10 percent since Google Inc.’s [[GOOG]] problems began earlier this week. While the temporary ban only affected the English-language Google web sites, the move casted further doubt on Google’s relationship with China, which now has the world’s largest internet audience.

Earlier this week, China’s foreign ministry accused Google’s English-language search engine of spreading vulgar content and instituted a nationwide ban between 9pm and midnight on Wednesday. However, the ban remained in place across many rural areas for a great deal longer than the 24-hours, which could deal a blow to the company’s attempts to gain market share.

Of course, some skeptics believe that the government’s ban was designed specifically to help the local internet search company Baidu. After all, the state’s broadcasting company, CCTV, relies on Baidu for a large slice of its advertising revenues and mounted a harsh campaign against Google this week. How much of a blow this deals, however, remains to be seen.

In the end, Baidu’s close relationship with China will likely continue to pay dividends down the road. Meanwhile, Google, the company’s largest competitor, appears to continue to face problems with the government that could rein in its attempts to gain market share.

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