Search engine to increase ad budget in bid to raid Baidu's market share

BEIJING - The Chinese e-commerce giant Alibaba Group Holding Ltd will provide a marketing budget of 1 billion yuan ($157.3 million) for its online search arm next year, going head-to-head with Baidu Inc, the operator of China's largest search engine.

Etao.com will use the capital to reach out to more Internet users and will especially target those who are not regular online shoppers, said Eddie Wu, president of Etao.

Etao will include items from foreign shopping websites and brick-and-mortar stores in the future, it said.

By the end of this year, a channel targeting overseas items will be added to Etao, which currently provides information on items from 300 overseas shopping websites.

The aim of the search engine, which was spun off from Taobao.com in June, is to "not let Baidu have an easy life", said Jack Ma, Alibaba's chairman and chief executive officer, earlier.

Baidu controls more than 70 percent of China's online search market, according to the domestic research company Analysys International.

Last week, in response to challenges from vertical search engines, such as Etao - that is, those that target specific sectors in their searches - Robin Li, Baidu's chief executive officer, said, "they (Internet users) don't want to distinguish their information needs from shopping to cars to lifestyle, so for any type of information needs they naturally come to Baidu and search for it."

"We have the largest user base and we have the most sophisticated search technology, so we are quite confident that users are relying increasingly on Baidu for all types of information needs," he added.

Baidu doesn't provide search results for items from online shopping sites in the same way as Etao, but will compete with its rival in the field of online advertising by targeting shopping websites, according to analysts.

Focusing on improving its product, Etao "does not expect to make money in the coming two to three years," Wu said.

Etao aims to have 10 million unique visitors by the end of the year, said Tiger Wang, Alibaba's chief marketing officer. He declined to provide current data, but said most of Etao's current traffic comes in the form of links from Taobao.com, which has more than 100 million unique visitors every day.

Etao, which provides information on about 1 billion items from 5,000 business-to-consumer (B2C) websites and 600 group-buying sites, is working to include as many items as possible from online shopping sites.