>> welcome to a "bloomberg west" special, "the baidu billionaire: inside the google of china." i am emily chang. i sit down with the baidu cofounder, robin li, for a rare, exclusive, live interview. we will talk about how he built baidu into china's largest search engine, and the challenges in a country with censorship. his relationship with tech icons like mark zuckerberg. and what he thinks of apple. but first, here is an introduction to the booming business that is baidu. china is one of the fastest- growing economies and tech industries. some 600 million users are online and one of the country's

most popular websites is baidu, the google of china. founded in 2000, baidu is china's number one search engine, 100 million daily users. the company went public in 2005, shares jumped on opening day. eight years later it is worth more than $50 billion and has fended off takeover offers from google, microsoft, and yahoo! >> it has been a great growth story for investors. it is positioned to benefit from the growth of the chinese internet market. >> like many companies, it is following its users to mobile. in july, it strengthened its push with a $1.9 billion deal to buy the chinese app store, 91 wireless. the most expensive acquisition ever announced by a chinese company. one of the few websites that is bigger is facebook. over the years, robin li has become friends with mark zuckerberg.

when zuckerberg made his trip to china in 2010, one of his first stops was baidu headquarters. facebook remains blocked in china. there have been reports the social network could rejoin the country in a joint venture with baidu. other sites have grown so big in the meantime, that li says it is too late. i will ask li whether he thinks facebook will ever be unblocked. but first, before anyone knew how big baidu could become, it attracted the attention of u.s. technology companies. li turned down offers from yahoo!, microsoft, and google. here is what he has to say about how hard that was. >> it was not easy. in the early days, before we went public, we had investors, and they were based in the u.s. they respected the tech giants

here. when there is a possibility to cash out at a price higher than they had expected, i would not blame them to think about it. lean toward selling the company. but for me, i knew that we had much brighter future than most people have thought about. i tried very hard to convince my investors, don't sell. i will make better returns for you. it is not just about my ego. it was no just about the future of the company. i had to tell them in a way that can be beneficial to them. the best way to be beneficial is to make more money. >> you came up with the search in silicon valley in the 1990's at the same time that google came up with google -- separately.

>> i call it link analysis. it is all the same or similar ideas. i saw the patent idea before even i came to silicon valley. when i worked in new jersey. later on, this kind of technology became the gold standard for all the search engines. >> i know you were educated partially in the united states. after graduating, you bought a biography of bill gates. >> yeah, that is right. >> is there a person or company that inspired you along the way? someone that you look up to most in the world of technology? >> i would say bill gates is probably the only person. at that time, i was an engineer. i studied computer science. microsoft was the most powerful technology company at the time. his story was widely reported back in china.

when i came to this country, for the first couple of years, i tried really hard to become familiar. to get good grades. after graduation, i realized it was time to get to know more about entrepreneurs, to know more about the opportunities that americans can provide for software engineers like me. bill gates was obviously the role model for that. >> why not stay in the united states? why move back to china? >> i thought about it. if there were good opportunities here, i would have stayed here. for the first few years after my graduation, i lived in new jersey.

i thought about starting my own company, but i wanted to work for a company for a few years. make some money. so that if i start my own company without any income for a few years, i could still live. >> an insurance policy. >> exactly. also, i wanted to get a green card so i could legally work here for a long time. >> still to come, we dig deeper into li's past. how he went from making $45,000 per year as a software engineer to becoming china's third richest man. ♪

>> welcome back to our "bloomberg west" special, "the baidu billionaire: inside the google of china."

i am emily chang. from humble roots, baidu ceo robin li has carved his path in tech history. here is a closer look at the man behind the google of china. robin li may be china's third richest man and the wealthiest tech entrepreneur in the country. his road to success started in one of the unlikeliest of places, a small village 250 miles west of beijing. >> he was born in eastern china. his parents were factory workers. he had four sisters, he was the only boy. early on, he was interested in computers. >> after graduating from college in beijing, he headed to the united states. he earned a masters from the state university of new york, buffalo. his first big break came when he won a patent for online search. >> he had two things going for him. number one, he understood the importance of search.

two, he was educated in the u.s. >> after a decade in the u.s., li returned to china with his business partner and together they founded the google of china. >> when you combine that with the secular growth of the internet traffic in china, a tremendous opportunity. >> his friends and family say his devotion to baidu defines him. he is known to fall asleep in his car after working late and he has never sold a single share of baidu stock. he has picked up influential friends along the way, like bill gates of microsoft, jack ma of alibaba, and a few enemies, too. >> with the google founders, the relationship is more adversarial. they are competitive. in 2004, larry page went to visit baidu in beijing. it was an interesting meeting. the baidu people were careful not to reveal too much.

>> regardless of how he is perceived, he is now worth over $12 billion. ranking above elon musk and eric schmidt. nearly two decades after he invented one of the most used technologies in history, his own brand of search. >> robin li doesn't just answer to himself, but to the chinese government, widely known for censoring. i asked about this and the recent controversy over the u.s.'s relationship with technology companies revealed by edward snowden. first, we talked about to -- two companies that remain blocked by the chinese government -- facebook and twitter. li says he hopes the government changes its mind, but it is not something he can control. >> i think facebook is a great

innovation. it makes people's lives easier. but that may not be the only way to do social. >> what should facebook's long- term strategy in china be? we know that mark zuckerberg wants to get back in. >> i hope they can get back, too. it is a government thing. >> do you think google will take another shot at china? >> i do not know. it is up to them. they are a very successful company. they have unlimited resources to do things that they like. they voluntarily gave up on the chinese market. >> speaking of that, eric schmidt said the deck in china is rigged in your favor. he said, every once in a while, a gift is handed to you. what do you say to that? >> even before they announced that they were giving up on

china, we had 70% of the market. google came into china in 2005. i think their market share was around 30%. by the end of 2009, they were about to give up their market share, it was in the teens. they invested aggressively. they said, china had 5000 years of history, we have a patience of 5000 years, and partial information is better than no information. blah, blah, blah. they lost money for five years. they ran out of patience, i guess. >> chinese users have said they question your search results because they are censored by the government. how much influence does the government have on your search results? >> we operate in china, and we need to obey the chinese law.

if the law says it is illegal, we take that out. the laws in china are just different from the laws in the u.s. >> do you ever feel a moral conflict when anti-government content is censored? >> well, for me, as an engineer, i try to make information accessible to the users. >> what about you as a person? >> for me, i try very hard to make things easier to be found. life is never perfect. there are things you can control and things you can not control. >> there have been a lot of concerns around the world, tech companies share information with the government. you do not think that distrust

could hold you back? and baidu back? and other chinese companies? >> um, we don't think that's a problem, in the sense that most of the users in the market, they do not care that much. they search for entertainment or information. music. all kinds of things. based on our experience with the chinese market, most people don't care that much about those kinds of information. for those people who do care, they have choices, alternatives. >> does baidu share information with the government? >> the government has not demanded this. if they do, we will see what the law says. >> what about nsa, with the recent revelations that

technology companies here, including google, yahoo!, and facebook, have been sharing information with the u.s. government -- >> i am not familiar with the u.s. market. if the laws require them to do things, they need to do it. if they do not, they have their own thing. >> you have heard about edward snowden, right? >> yes. >> how is he perceived in china? do people think of him as a hero? >> i have not heard much about comments on him. it is more about the discussion the u.s. government is also spying on their people. there is nothing special about the u.s. government. it is like any other government in the world.

>> very few chinese technology companies have gone global. why do you think that is? do you think it is because people outside of china do not trust the chinese government? >> no, it is a matter of time. they are pretty much a global company now. for a company to be successful internationally, they do not need to be successful in the u.s. that is just one part of the world. >> really? >> maybe that is hard for you to understand, but for us, it is the case. for baidu, which has not come to the u.s. market, this is a market that is very different. >> apple's market share has slipped in china, opening the door for rivals making cheaper android smartphones. we will ask robin li what advice he has for tim cook next, in our

special "baidu billionaire: inside the google of china." ♪

>> welcome back to our "bloomberg west" special, "baidu billionaire: inside the google of china." i'm emily chang. succeeding in china is the key to the future of many technologies, especially apple. apple's troubles in china have been mounting. a recent survey by a researcher found that apple use has dropped, putting it behind companies like lenovo and xiaomi. that is also behind market leader samsung, which commands 17% of the market. apple is focusing on building

stores in smaller chinese cities. most importantly, apple still has not inked a deal with china mobile. i asked about his advice for tim cook. >> both are strong companies. strong, not only meaning their market position is strong, they have cash, but also strong- minded. apple has their ways of doing things and china mobile has their ways of doing things. if they match, they can have a partnership. if they do not match, they cannot. >> tim cook -- have you met him? what do you think of him? >> he is good. reasonable, smart. he understands the chinese market much better than many of the other u.s. internet company leaders.

>> how does he compare to steve jobs? >> i do not know. i never met steve jobs before. from the media, i think he is certainly very different. very strong opinions on all kinds of things. does not care too much about market. tim cook is more typical ceo. if china is a big market, we listen to the market. >> apple is losing market share in china. why do you think that is? >> that has to do with the mentality of one-size-fits-all. apple has great experience here in the u.s. in china, the chinese characters are very different from english. you need an input method for that. apple does not have a good one and they do not allow one to be uploaded in the app store. there are a lot of things that

the chinese users are not so pleased about the iphone. there is room for improvement. >> what do they not like? >> the smaller screen, compared to the samsung phone. they cannot upload or download their own input method engines. there are a lot of things. the needs are chinese-specific that may not be available on the ios system. >> is apple not as cool in china as it once was? >> apple is still very cool. they have a very loyal following. a lot of people, including my wife, use apple. for me, i am different. i am an internet executive. i need to know -- understand how the average mobile phone user feels.

i use an android phone. >> galaxy? >> the galaxy note. >> the larger size? >> yes. >> you like the larger size? >> i like the large size, yes. i grew up using pcs. i am used to a larger screen. i do a lot of things online. a smaller screen really make things uncomfortable to me. when i carry a phone around, i really use it more or less as a pc. >> what do you think of xiaomi? this is a smart phone maker. they have risen superfast. they are neck and neck with apple in terms of market share in china. people compare them. what do you think about them? >> that is the alternative.

couple left for the chinese and up north on the drawbacks for the iphone. xiaomi has a software background, so they understand how to design software for the end-users. he did great. i like the company, i like the product. >> xiaomi has a smart tv. baidu has a smart tv should apple? >> i don't know. the whole world is moving to internet. eventually all of the tv will be internet enabled. exactly what kind of format or product, i do not know. people are trying all kinds of different things. we are trying. it is just too early to tell. >> should apple be innovating faster? >> apple is a great company.

they're innovating quite quickly. but apple is just one company. you cannot expect them to do everything for everyone. when i talked to tim, he said the same thing. we do not try to be everything for everyone. we have our laws and the principle -- there are things that we do, and things we don't. >> talk about the expansion of chinese companies. xiaomi, for example. what kind of challenges are they going to face as they expand outside of china? >> i think most of the chinese companies are not familiar with the international market. china is a large market. it is growing very, very quickly. when you think about where to invest -- china comes up first for a lot of people. it took companies like us, like xiaomi, like others, took a long time to realize we need to

go out of china eventually. it is a global competition. we need to go out and serve users elsewhere. >> and that is it for our "bloomberg west" special, "the baidu billionaire: inside the google of china." thanks for watching. i'm emily chang. be sure to catch "bloomberg west" every week. ♪

>> this week on "political capital," senator elizabeth warren. also julianna goldman and richard miller, and views from margaret carlson on chris christie's 2016 chances. we begin the program with senator elizabeth warren. thank you for being here with us. >> good to be here. >> i know you do not like the -- but the administration is not supporting that. >> let's talk about big banks. what could you do now to reduce this concentration?