How a Chinese Company Built a $250M Search Hijacking Empire

https://medium.com/against-surveillance-capitalism/how-a-chinese-company-built-a-250-million-search-hijacking-empire-35f957566852

by endsofinvention • 7 years ago

196 58 7 years ago

medium.com

soup10• 7 years ago

When Google pays Apple $10B a year to be the default search engine on iOS it's "business".

But when a no-name Chinese company redirects searches to Bing suddenly its "fraud" and "search hijacking" and a "national security threat".

All this really shows is the ridiculous amount of revenue search has that such a simple scheme is making 100M+

RHSeeger• 7 years ago

Yes? They're completely different scenarios. One is setting the default search engine, the other is actively subverting the user's intention.

chrischen2• 7 years ago

The user’s intention is to proxy the search results so it is anonymized. Based on their chrome extension description it seems to do that. It works not unlike duckduckgo.

Spinning it as some Anti-Chinese national security thing is probably unnecessary.

erikrothoff• 7 years ago

So 7 million users equals a revenue of $250 million. Meaning 1 user is worth $35 on an annual basis. That’s insane! No wonder Google is so huge.

hamhand2• 7 years ago

Google doesn't push their shopping affiliate links as agressively.

omeid2• 7 years ago

Maybe not exactly in those terms, but effectively every Google ad is logically the same and even more lucrative, as google gets paid for potential purchases unlike affiliate links which only pays for actual purchases.

And if you think Google is not aggressive, search "credit card" without ad block. It is insane!

onetimemanytime• 7 years ago

Google has $1x0,000,000,000.00 in revenue and they have no business in China. So it's more than $35 for Google, especially in US, EU, Canada, Australia etc.

hamhand2• 7 years ago

My old comment still applies.

After seeing all those sketchy or even fraudulent mobile ads by TikTok's parent company ByteDance, I won't be surprised if that SMS is a bait.
But pretty much everybody does it in China, Baidu etc, like "You phone has 8GB of garbage, download us to clean it", "Download us to boost your signal by 4 times immediately", "This cutie just sent you a message, download us to repsond", basically anything to make you download their apps, and only political problems go punished.

Gustomaximus• 7 years ago

Genimous Technology Co Ltd, a public company traded on the Shenzhen Stock Exchange under the symbol 000676, is the 12 billion CNY ($1.7 billion USD) company that is behind these extensions

If you're brave, short this. Shining a light on an edge of ethical/legal business has a good chance of making their revenue dry up fast.

donmcronald• 7 years ago

It’s going to be super interesting to see what the reaction to this is (if any). Even though they sound like a terrible company, everyone should take note how easy it is for Google, Mozilla, Microsoft, etc. to make them disappear from existence.

computerex2• 7 years ago

They are supposedly driving 10% of Bing's search volume... I think Microsoft probably loves them.

fasteo• 7 years ago

>> Shining a light on an edge of ethical/legal business has a good chance of making their revenue dry up fast.

Any previous case ? Having a hard time believing that a stock is driven by ethical issues

adventured• 7 years ago

Any previous case ? Having a hard time believing that a stock is driven by ethical issues

There are plenty of examples.

See the recent case of Papa John's. The stock imploded by 50% over a few months in an ethical scandal related to the founder (John Schnatter) saying the N word among other things.

Schnatter had criticized the NFL's handling of the kneeling protests that went on in relation to Colin Kaepernick, saying that it had hurt Papa John's business (they were a prominent sponsor of the NFL). Schnatter took a lot of flack for that criticism.

On a call with Papa John's marketing firm, he said this:

"Colonel Sanders called blacks n-----s," he said, complaining that Sanders had never received backlash, according to Forbes.
Forbes also reported that Schnatter recalled growing up in Indiana, where he said people used to drag black people from their trucks until they died. Forbes reported that Schnatter's comments were intended to demonstrate his stance against racism, but that people on the call were offended by them.

Schnatter as the founder, and largest shareholder, was forced out of the company. Papa John's sales dropped for the first time in 14 years and they slid into losing money after being consistently profitable throughout their history.

Papa John's was tied up with the NFL in a marketing arrangement, that involved them being the official pizza company sponsor for the league. That arrangement was ended in the months following all of this. Papa John's same store sales promptly nose dived as their public perception was tarnished (they tried numerous promotions to prop that up and it all failed).

In total they lost about 15% of their sales. The company removed several executives and has been working to stop the decline plus repair their brand (they brought in Shaq in a prominent way as one example, he has sparred with Schnatter a few times verbally and Schnatter continues to run his mouth about the situation publicly).

offtotheraces• 7 years ago

Check out Cootek - Chinese app developer that went public about a year ago (main app is TouchPal keyboard). They were engaging in "malicious and disruptive behavior" to drive their revenues (Buzzfeed broke the story) and Google banned them from distributing their apps on Google Play. Stock is down from >$9 before the news broke to $5 today.

https://www.buzzfeednews.com/article/craigsilverman/google-b...

https://finance.yahoo.com/quote/ctk/

jmull3n• 7 years ago

Is there anything actually illegal about this? What laws are broken?

C1sc0cat• 7 years ago

The Computer misuse act(UK) GPDR (EU) are just two

tendencydriven• 7 years ago

We have no idea what data they're actually storing, and everything the extensions does is stated in the description of the extension, I'm not a lawyer but I don't think the Computer Misuse Act is being broken here. We have no idea on the data they store so who knows if GDPR is.

But there's also the fact that they are not a EU or UK company, they are Chinese. Where the laws are far more relaxed about things like this.

powerapple3• 7 years ago

so many silent business ideas. It is a win-win situation. Customers want to hide themselves behind proxy, and the company make good money from big players. Very smart!

point78• 7 years ago

It's not legal whatv theyre doing.

powerapple3• 7 years ago

I am not sure. It really depends on all small prints when you install their extensions I guess. All these extensions ask for permissions to work. It is very likely to be legal in my opinion.

bartkappenburg• 7 years ago

On a side note: when I accidentally viewed the Medium article in landscape mode the reference links at the bottom got a strikethrough...

jfoster• 7 years ago

This doesn't feel completely clear cut. Users installed the add-on expecting their search to change. It changes their search. Presumably it's at least preventing Google & Bing from then knowing who made the search. Whether it's truly anonymous seems a bit of a stretch. (how do they define it?)

endsofinvention3• 7 years ago

These extensions do not simply change the default search in the browser. They actively hijack searches on the Google and Bing homepages. Test it yourself in a sandbox.

A user who literally types in Google.com or Bing.com into their browser address bar intends to conduct a search using Google or Bing. Their intention is very clear. It is not to have their search hijacked and taken to a "private" search engine.

They also use Bing to power their search results and ads so Microsoft is still able to collect the user's data.

dumbfounder2• 7 years ago

It's still sort of doing what the extension says it is going to do. On the extension page it says

"Keep your searches private by redirecting searches that may be tracked to Search Encrypt, a privacy-focused search engine... For your privacy, Search Encrypt intercepts the requests if it's on our list of sites"

So it says it hijacks right in the description.

On their website for their "search engine" it says

"The Search Encrypt encrypts your search terms between your computer and searchencrypt.com. Search Encrypt is supported by sponsored ads featured on our search results page."

Which obviously (to you and me anyways, not to others) is also done at Google so there is no actual benefit other than Google doesn't get your data.

My conclusion is that, yes, they are scummy and taking advantage of fears of people to make a buck. But is it an outright scam? Not so clear.

ga-vu2• 7 years ago

Title says "how" but it doesn't explain anything.

It just lists that they run two malicious Chrome extensions.

Talk about clickbait.

GreenMoose• 7 years ago

Was thinking exactly that.

danso2• 7 years ago

Genimous Technology Co Ltd, a public company traded on the Shenzhen Stock Exchange under the symbol 000676, is the 12 billion CNY ($1.7 billion USD) company that is behind these extensions [1]. Their ownership is concealed through shell companies setup in offshore jurisdictions like Polarity Technologies Ltd in Cyprus and EightPoint Technologies Ltd in the Cayman Islands, but can be traced through analysis of the browser extensions terms of service and contact information [2, 3]. Based on public filings, in the first 6 months of 2019, Genimous made 900,296,410.76 CNY ($125 million USD) from its overseas division, which generates its revenues from ads on search results pages [4, 5 (page 15 of the PDF)] for a $250 million yearly run rate.

ga-vu2• 7 years ago

That's just a description of the company, probably copy-pasted from some stock market site.

When someone says "how they built an empire" I expect to read their history and modus operandi.

michaelbuckbee• 7 years ago

DDG uses Bing results (+ some tweaking) for their search results.

Per their description here: https://help.duckduckgo.com/duckduckgo-help-pages/company/ad...

They use Yahoo ad search syndication to put their own ads against them.

They also insert their own affiliate links onto results.

How is that materially different than what's happening here? That this company presumably doesn't have a backend search API agreement with Bing?

chrissnell• 7 years ago

The user is intending to search with Google but the query never touches Google or shows any Google results. That's why it's different.

Thanks for the DDG link, though. I had no idea.

yborg• 7 years ago

Apologies for offtopic, but do all search engines do the affiliate thing? I.e. if I click on a Google link and buy a thing on Amazon, Google gets paid?

balls187• 7 years ago

There is something poetic about Google allowing a Chrome extension to hijack search queries.

I'm loathed to install things like Grammerly, or Honey precisely because of fears like this.

whoanow• 7 years ago

I used to work for a company that did desktop search hijacking. Looking back I can't believe how normalized it was internally.

seapunk• 7 years ago

I can't read this article.

Error 410 This account is under investigation or was found in violation of the Medium Rules.

domador• 7 years ago

Hmm... I'm unable to access and read this article. Medium displays a 410 error and an ominous message: "This account is under investigation or was found in violation of the Medium Rules." Given the subject matter, I'm starting to get a little suspicious about why this article was taken down.

alt3red• 7 years ago

I just noticed that as well. You can still read the article by doing a google search and looking at the cached version.

robtherobber• 7 years ago

Maybe try https://web.archive.org/web/20191211012207/https://medium.co...

endsofinvention3• 7 years ago

Update: Medium has restored the article. The Chinese troll army failed to suppress the news for long.

Please see a screenshot of the full article here:

https://imgur.com/a/uJxate0

For the data table, go here:

https://airtable.com/shrtyVQQG1DhaXIxx

It looks like this company is trying very hard to suppress this news. A media blackout might work in China, but not in America.

I am in contact with Medium to get the article restored. If anyone has a Medium contact, any help would be appreciated.

ryanmercer• 7 years ago

It's displaying for me fine an hour later.

wsgolfer• 7 years ago

Cached link to the medium post.

http://webcache.googleusercontent.com/search?q=cache:qwZu8OV...

rodneyzeng• 7 years ago

I can open the link right now.

Koremat6666• 7 years ago

American companies built a billion dollar industries based on this : Ask Toolbars, Babylon and Yahoo.

How a Chinese Company Built a $250M Search Hijacking Empire

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