June 9, AtoZForex – Baidu is a giant Chinese web services company, which accumulates about 70% of search results in China. Recently, it has made a decision to ban all the ads by Binary Options brokers on its search results. Why Baidu decided to ban all the ads from Binary Options brokers? AtoZForex learned that Baidu Inc bans Binary Options ads due to a sad story, involving the death of a Chinese student with a rare form of cancer.
The events that led to Baidu's stock plunge
Wei Zexi, a 21-years old university student in China has been suffering from a rare form of cancer called synovial sarcoma. Wei was browsing Baidu when he saw a paid advertisement which was presented on the top of Baidu search results. Wei followed up the ad, he went to Beijing to have the expensive experimental treatment. Unfortunately, the treatment was not effective and Wei died on April 14.
Before his death, Wei Zexi recorded a video regarding the treatment case. Also, he shared his fully justified anger online. Wei was complaining about the hospital for misleading information about the treatment in its paid-for advertisements. Furthermore, he was sharing his unpleasant experience with Baidu, saying that the latter was allowing misleading ads on its network without proper reliability checking.
After Wei’s death, a lot of negative comments were flowing in Baidu’s direction. Critics were saying that the Chinese search engine giant was presenting ads on its network based on who-paid-most method. Following the wave of criticism, Baidu stock lost 10% in time after Wei’s death.
Baidu ordered to change its ads-related politics
China’s regulator of the Internet, the Cyberspace Administration of China (CAC) requested Baidu to review and make some fundamental changes regarding its ads and search results policies. As it appears, Baidu must fulfill the following:
• Reduce the amount of paid ads represented in search results
• Change the system of its search results ranking, showing the most reliable sources as the first ones
• Indicate the paid-for listings in a clearer and easily-seen way
Why Baidu Inc bans Binary Options ads?
After the incident and the warning from the China’s Internet regulator, Baidu decided to make additional changes of its own. The Chinese giant said it is going to cut out altogether ads from areas it suspects to be even a little risky. Binary Options advertisements are considered to be the top ‘risky’ ads, as for Baidu’s evaluation.
Baidu will not discontinue Retail Forex broker ads, but they will probably become more expensive. Also, it will not accept any new Binary Options customers’ campaigns. As Baidu Inc bans Binary Options ads, it can have a big impact on brokers that rely mostly on online advertising for generating and converting the clients.
Think we missed something Let us know in the comments section.