China's Baidu, Microsoft to cooperate in search

[July 05, 2011]  BEIJING (AP) -- Chinese search giant Baidu Inc. will use Microsoft's Bing for some English-language results as the software giant tries to expand its small share of China's search market.

China has the world's biggest population of Internet users, with more than 450 million people online. Global e-commerce, search and other Internet brands have struggled to gain a foothold against aggressive local competitors in a heavily regulated market.

No financial details of the tie-up between Microsoft Corp. and Baidu were released. The Chinese company has been looking at possible expansion abroad.

Google Inc., which competes against Bing and Baidu, closed its China search engine last year after saying it no longer wanted to cooperate with government censorship. Chinese users can reach Google's site in Hong Kong, a Chinese territory without censorship, but government filters can make access sluggish and its China market share has declined.

Baidu has 75.8 percent of China's search market while Google has 19.2 percent, according to Analysys International, a Beijing research firm. Bing's China market share is so small that Analysys counts it among "others" that have a total of 2.2 percent.

Baidu, long seen as a Google imitator, has launched a series of video and other services in an effort to differentiate itself.

In a statement, Baidu vice president Samuel Shen said the agreement with Bing will improve English search for Baidu users and raise Bing's profile in China. Baidu says its site already handles about 10 million English searches daily.

Industry analysts say a big share of future growth in Chinese search will be in the countryside, where users speak little English.

Beijing encourages Web use for business and education but tries to block access to material considered subversive or pornographic. Search engines in China are required to block results for banned sites abroad.

China's top Internet companies are profitable and growing fast but are only beginning to expand abroad.

A major Chinese portal, Sina Corp., said last month it will launch an English-language version of its popular Weibo microblog for users abroad, entering a market dominated by U.S.-based Twitter.

Other competitors including Chinese state media outlets have jumped into China's search market since Google's departure. The government's Xinhua News Agency and state-owned phone carrier China Mobile Ltd. launched their own search engine, http://www.panguso.com/, in February.

Baidu still makes nearly all its revenue in China. Its profit for the first quarter of 2011 more than doubled from a year earlier to 1.07 billion yuan ($163.5 million).

Baidu launched its first site abroad in 2007 in Japan and analysts expect more sites in other countries to follow.

Last month, Baidu announced it was investing $306 million in Qunar, a Chinese travel search engine, to become the company's majority shareholder.

Google has said its advertising revenue in China is growing despite the closure of its mainland search engine.

The company was allowed to keep sales offices in China and says its biggest opportunities are in selling advertising for local websites or to companies that want to reach customers abroad through Google's global sites.

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Online:

Baidu Inc.: http://www.baidu.com/

[Associated Press; By JOE McDONALD]

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