Over 600 Chinese Internet marketing agencies take on big names Google and Baidu

More than 600 Chinese Internet marketing agencies have accused the big-name search engines like Google and Baidu of breach of contract, which may put them out of business.

Six hundred and thirty-seven search engine marketing agencies issued a statement complaining that the major search engines have stepped in to snatch away clients directly, in violation of contracts that ensures these agencies act as intermediaries to expand the market.

It claimed that there will be a lawsuit filed against a large search engine company, but phone calls to booksir.com that heads the alliance were not answered.

Search engine giants like Google, Baidu and Yahoo have not responded to the allegations.

The marketing agencies fear that the current profit sharing mode may be erased if search engine companies do business with clients directly as 60 percent of their profits comes from search engine operators.

According to the agencies, less than 10 percent of the profits they share remains after costs of promotion, marketing and operation are deducted.

"Ninety-five percent of agencies are in the red," said Fu Dekun, deputy director of booksir.com, who hopes that membership of the alliance will expand to 1,000 within the year.

There are approximately 120,000 small and medium-sized marketing agencies in China's online search engine market, 56.6 percent of which is dominated by the Chinese language search engine Baidu and 32.8 percent by Google, according to a report by IResearch released last week.

Its statistics show that less than one million out of 20 million businesses in China uses the Internet as a marketing channel.

Source: Xinhua

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