Other than Baidu's financial gains through search engine services, the tech giant now earns billions of dollars each year through online marketing services.
Baidu, founded in 2002, also offers the largest Chinese-language query-based searchable online community platform, interactive knowledge-sharing program, and encyclopedia.
Although the company's total revenues in 2014 were only 12 percent of Google's, Baidu's earnings were twice bigger than Yahoo's $4.6-billion for the same year.
Baidu's online marketing service called pay for performance (P4P) that utilizes pay-per-click (PPC) is the secret behind the company's business success.
The P4P system is a Web-based auction system that lets clients bid for priority positioning of ad links based on keyword searches by users. The company utilizes a Comprehensive Rank Index (CRI) that gives priority placement to links based on clients’ bid prices and their links’ rank scores. It is calculated by multiplying the quality score to the bidding price.
The PPC, on the other hand, works when users clicked the link where an advertisement was placed. The cost per click multiplied to the number of clicks becomes the total charge.
However, there are key factors that affect online marketing revenues. The factors are the total volume of users and customers, total number of search-queries started on Baidu’s and its Union members’ Web properties, the click-through rate on promoted links, competitiveness of keyword bidding, customers’ online marketing allocations, the total number of displayed sponsored links and advertisements, and the bidding price related with each click through.