There is a great debate going on in the analyst community regarding whether Chinese regulations requiring Internet users in China to use their real names will boost revenue for search engine leader Baidu. We often hear that Facebook has more valuable traffic because all the users are known but this misses the point that purchasing intent isn’t always known – even if you know who a person is online.

But having search intent which could lead to purchase intent coupled with the real name of a user which can be cross-referenced in CRM systems and demographically analyzed could lead to higher cost per click from advertisers.

In the US and EU there are all sorts of privacy laws prohibiting advertisers and other companies from following you too closely. You could argue regulations aren’t strict enough but the point is, they are there. One wonders how an unregulated ecommerce and search market can be tapped to maximize user traffic. It will be incredible to watch and see if Baidu does indeed benefit tremendously from having user identities.

If so, it is possible advertisers and other companies worldwide will push regulators for more latitude in engaging in activities which privacy advocates and regulators frown upon today. Check out this article in IBD for more.