Bottom line: Baidu’s massive ad cleanup in May and shuttering of a site for travelers reflects ongoing pressure on its core ad-dependent search business while spotlighting its inability to branch into non-search areas.

Search giant Baidu (Nasdaq: BIDU) is in a couple of headlines as we head into the latter part of the week, reflecting two major challenges the company is facing. The larger headline says the company has just removed millions of ads, a whopping 237 million to be precise, for reasons including being misleading and promoting unhealthy topics like porn. The second has the company shuttering a relatively minor travel site, which made me laugh just slightly, since I wasn’t even aware the company had such a site.
The first story is certainly the most important, since Baidu still derives the vast majority of its money from ad sales related to its core search business. By comparison, the second story demonstrates once again Baidu’s inability to diversify into areas besides search. This particular travel investment, while probably quite small, follows a long stream of similar, and often much larger, investments into other areas like takeout dining, and e-commerce, just to name a few. Read Full Post…