Wednesday, August 19, 2009

Microsoft's Bing Hit With Illegal Pharmacy Ads

 

It's usually a compliment to be compared to China's fast-growing Baidu (Nasdaq: BIDU), but Microsoft's (Nasdaq: MSFT) Bing is being compared in a notorious way.

According to a study conducted by an online compliance and Web-based pharmacy verification service, 89.7% of the reviewed drugstore ads on Microsoft's Bing came from illegal pharmacies.

The study, released Aug. 4, scoured the paid search ads delivered when queries for prescription-based pain medications and erectile dysfunction drugs were submitted. Most of the top advertisers proved to be bogus, often-offshore pharmacies that don't ask for prescriptions or perform age verification checks.

This should all bring Baidu investors back to last November, when a scorching Chinese television expose revealed that China's leading search engine was accepting ads from unlicensed medical companies.

Baidu vowed to clean up its act, and the stock has more than tripled since bottoming out eight months ago.

Baidu's blunder of not having licenses on file for all of its medical sponsors didn't hit home at the time. It felt like a China-specific problem, given the nascent nature of Internet usage in the world's most populous nation. The Microsoft study hits close to home, and leads one to wonder if regulators need to do a better job in watching over the online advertising practices at Yahoo! (Nasdaq: YHOO), Google (Nasdaq: GOOG), and Bing.

Microsoft's spunky search engine doesn't want to be killed in the crib, so the company probably will follow Baidu's example and vow to clean up its marketing platform if the groundswell builds.

And that would be the right way to earn a comparison to Baidu.  

 

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