BizChina

When Google recently disclosed an attack originating from China targeting more than 20 U.S. technology companies, the company revealed only that the attack was "highly sophisticated and highly targeted." On Thursday McAfee announced that it found at least one of the technological footholds for the attack: a previously unknown vulnerability in Microsoft's Internet Explorer browser.

Targeted attacks using unpublished vulnerabilities in browsers are nothing new, especially for companies like Google with valuable intellectual property to protect. In fact, what may be most striking about the so-called "Aurora" exploit is just how old the attackers' target was.

As hundreds of browser bugs have been exposed and patched over the last decade, browser attacks like the one Aurora used are considered by some cybersecurity researchers to be on the wane compared with trendier targets like PDF readers, browser plug-ins and other complex applications, says Ed Skoudis, a cybersecurity researcher with IntelGuardians. That's because programs like Internet Explorer have been probed for vulnerabilities for years and patched repeatedly, while programs like Adobe Readers are just starting to be targeted by hackers.

Cybersecurity researchers publicized 30 new bugs in Internet Explorer last year, compared with 49 in 2007 and 90 in 2006, according to iDefense, the security division of Verisign. That compares with 45 bugs in Adobe Acrobat last year, up from a mere four in 2006. Those kinds of statistics appeared to show that Internet Explorer was being hardened over time as various bugs were exposed and patched, Skoudis says.

Domestic search firm Baidu Inc could be the biggest beneficiary of a possible pullout from China by Internet major Google, leading industry experts said yesterday.

The NASDAQ-listed Baidu already dominates the Chinese search landscape and it has signaled its intentions to spread wings, even before Google hinted at a pullout.

The California-based Google could see an exodus of advertisers from the Chinese mainland and see them switching to Baidu, something that could strain revenues in the long run for the US firm, experts said.

"Google may get applauses from many for its stance," said Li Zhi, an analyst with research firm Analysys International. "But its advertisers may not be convinced, even if it buries the hatchet with the government."

She said if Google exits China, Baidu would have a near monopoly of the market in the short term.

The world's largest search engine said on Wednesday that it may close its China business if the government does not allow it to provide uncensored results in its Chinese version website Google.cn.

Read more on Google's loss could be Baidu's gain

It's easy to give up if you've already lost the battle. And Google is doing just that in China. Eric Schmidt's move to quit offering a censored Google.cn search engine to the Chinese market has been read by idealists as the right thing to do. But it is first a business decision.

Even though Google's market share climbed from 15% in mid-2006 to 31% today, the company had hoped for a bigger share by now. Kai-Fu Lee, Google China's former president, told me in 2006 that Google not only wanted to have a competitive product to Baidu's, the local search leader, but a superior product. This didn't happen: Baidu has only increased its market share, going from 47% in mid-2006 to 64% today. That's a big lead.

Baidu, started by China-born entrepreneur Robin Li in late 1999 just as Larry Page and Sergey Brin were cranking up Google in Silicon Valley, understands the local Chinese market better than Google's Mountain View team.

Beijing Tongrentang Group Co, a major traditional Chinese medicine maker, announced Thursday its 2009 net profit rose 16 percent to 800 million yuan ($117 million) from a year earlier.

Its sales exceeded 10 billion yuan for the first time, an annual increase of 12 percent.

The major performance indicators have been growing at double-digit rates for 13 consecutive years, said Lu Jianguo, the group's vice Party chief.

"It marks a historical breakthrough since the establishment of the company in 1669," he said.