People walk through the lobby of the Baidu Inc. headquarters in Beijing, China. Microsoft, which is gaining users for Bing in the U.S., is building on its partnership with Baidu after ending a search engine agreement with China’s Alibaba Group Holdings Ltd. Photographer: Stefen Chow/Bloomberg
Microsoft Corp. (MSFT) and Baidu Inc. agreed
to bolster their Internet-search partnership in China as the
companies seek to gain users from Google Inc. (GOOG) in the world’s
biggest Internet market.
The agreement will let Baidu users see English search
results generated by the U.S. company’s Bing technology to users
in China, Viola Wang, a spokeswoman at Microsoft’s MSN venture
in China, said by phone today. A service jointly offered by the
companies will start this year, Baidu said in an e-mailed
statement today.
Baidu, based in Beijing, is expanding outside its main
business of Chinese-language search, after fending off Google in
China. Microsoft, which is gaining users for Bing in the U.S.,
is building on its partnership with Baidu after ending a search-
engine agreement with China’s Alibaba Group Holdings Ltd.
“This is not good news for Google,” said Jake Li, who
rates Baidu shares “accumulate” at Guotai Junan Securities in
Shenzhen. Most Chinese Internet users currently prefer Google’s
English-language search results over Baidu, whose service will
be improved by the partnership with Microsoft, he said.
Google declined to comment.
Google, owner of the world’s most popular search engine,
accounted for 19.2 percent of China’s search market by revenue
in the first quarter, down from 19.6 percent three months
earlier, according to research firm Analysys International.
Google’s figures includes revenue generated from its local sites
and international services, according to Analysys.
Market-Share Losses
Increased demand from Chinese companies marketing on
international websites such as the English-language Google.com
helped Google post increased revenue in China in 2010, Daniel Alegre, president for Asia-Pacific at Google, said in December.
Google has lost market share to Baidu in China since the
Mountain View, California-based company pulled its Google.cn
search-engine out of the country last year, according to data
from Analysys. Baidu increased its share to 75.8 percent from
75.5 percent in the first quarter, while Microsoft Bing’s market
share is less than 1 percent, according to Analysys.
Baidu had an existing agreement with Bing for some mobile-
phone users in China, Haoyu Shen, senior vice-president at
Baidu, said in May. Baidu is working on efforts to expand
overseas, and its developing products in 12 foreign languages,
Shen said at the time.
Alibaba stopped offering Microsoft Bing on its eTao search
service, Justine Chao, a spokeswoman at Alibaba, said in May.
To contact the reporter on this story:
Mark Lee in Hong Kong at
wlee37@bloomberg.net
To contact the editor responsible for this story:
Young-Sam Cho at ycho2@bloomberg.net
Article source: http://www.bloomberg.com/news/2011-07-04/microsoft-baidu-reach-agreement-for-search-engine-in-china.html
