On Sunday, an investigative report by Chinese media The Beijing News revealed more flaws in Baidu’s advertising business. After two months of closely scrutinizing Baidu search results, The Beijing News discovered that illegal gambling sites were posting verified corporate ads — marked with a giant blue “V” — on Baidu at night. By morning, the websites were shut down and the ads disappeared.
On June 26 from about 10 p.m. until 9 a.m., searching for “Grand Lisboa” on Baidu would pull up advertisements for illegal gambling sites instead of the famous casino in Macau, the report said. During the day, the illicit ads were nowhere to be found.
“Baidu has already reported [this case] to the police, and is collecting evidence and actively assisting with the investigation,” stated Baidu’s advertising arm through its official microblog Weibo on Monday. “Gambling is a serious offense and Baidu strongly prohibits gambling businesses from advertising.”
Through third-party advertising agents, gambling sites can register corporate accounts on Baidu’s advertising platform. All they have to do is find a legitimate company that hasn’t registered on Baidu yet and fake their business license with a little help from Photoshop.
“We don’t need to sign any agreements or meet in person,” said a third-party advertising agent quoted in the report by The Beijing News, referring to their interactions with shadowy gambling sites. “We just introduce ourselves through [messaging app] QQ. They want business, we receive a client fee.”
Victims of impersonation, such as a car service company registered in Henan province, central China, have no idea that their information is used to register for corporate accounts on Baidu and push gambling ads.
According to the report, opening a corporate account costs 2,400 yuan (about $360) and advertising agents can earn up to 80 percent commission per account. One agent that spoke with The Beijing News reporters said that they opened a total of 38 fraudulent accounts.
This isn’t the first time Baidu has run into trouble with its advertising platform. Only a few months ago, the Chinese tech giant stirred controversy when Wei Zexi, a 21-year-old college student, died after undergoing experimental treatment at the Second Hospital of the Beijing Armed Police Corps, which was advertised on Baidu.
According to Baidu, the company found 8,623 illegal gambling websites in the first quarter of this year alone and prohibits 7,239 gambling-related keywords in its search engine.
The Chinese tech giant relies heavily on its marketing revenue, which accounted for 94.4 percent of its total revenue in the first quarter of 2016. The company currently works with 36 third-party advertising agencies, which help manage accounts and clients for the tech company’s advertising platform.
Chinese netizens reacted with incredulity and anger over yet another Baidu advertising scandal. “Ha-ha. If media hadn’t reported this, you wouldn’t have discovered anything. Piece of trash!” said one netizen on Weibo.
(Header image: A man is seen walking in Baidu’s headquarters in Beijing, Sept. 2002. VCG)