Alibaba Wants to Be Baidu's Worst Nightmare

Two of China's dot-com giants are on a collision course. E-commerce leader Alibaba wants to take its shopping search engine to the next level, and Baidu (NAS: BIDU) is in the way.

"People ask why I got involved in search engines," Alibaba CEO Jack Ma said at a conference over the weekend, as retold by The Wall Street Journal. "The reason is not to let Baidu sleep soundly. If Baidu sleeps well, then Internet users in China cannot sleep well."

It remains to be seen whether eTao, Alibaba's comparative-shopping engine, will make a dent in Baidu's gargantuan market share. To be fair, it probably won't make a difference. China's online juggernauts haven't had a lot of success in taking on other specialists.

Outside of SINA's (NAS: SINA) success with microblogging phenom Weibo, China's dot-com darlings haven't really excelled out of their areas of core competencies.

Alibaba spent the weekend showcasing how it will be a thorn in the side of more companies than Baidu. Its Aliyun mobile operating system will take on Google's (NAS: GOOG) Android. Plans to expand its e-commerce stronghold outside China have eBay (NAS: EBAY) in its crosshairs.

For now, though, it's all rhetoric.

Overseas expansion has been a hard sell for Chinese companies. Just ask Baidu, which rolled into Japan a few years ago but remains a bit player there.

Thankfully, a Chinese online company doesn't need to succeed outside China to find heady growth. Baidu's revenue and earnings climbed 78% and 95%, respectively, in its latest quarter. With growth like that, there's nothing that Alibaba can truly say that would have Baidu tossing and turning at night.

If you want to stay abreast of the latest developments at China's leading search engine, addBaiduto My Watchlist.

At the time thisarticle was published The Motley Fool owns shares of Google.Motley Fool newsletter serviceshave recommended buying shares of Google, SINA, Baidu, and eBay. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors.Longtime Fool contributorRick Munarrizcalls them as he sees them. He owns no shares in any of the stocks in this story and is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Motley Fool has adisclosure policy.

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