* English searches on Baidu to pull up Bing results
* Tie-up to dent Google's market share - analysts
* Baidu to push into international search market
* Analysts sceptical Baidu can penetrate English search
* Bing censors results in line with Chinese regulations
(Adds Microsoft, analyst comment; background)
By Jason Subler and Georgina Prodhan
SHANGHAI/LONDON, July 4 China's Baidu
is to partner with Microsoft for English-language
search, giving the U.S. software giant a chance to expand its
tiny Web presence in a market Google has stepped back
from, and helping the Chinese company's international ambitions.
The tie-up will direct English searches from Baidu to
Microsoft's Bing, which will deliver the results back to Baidu's
Web pages, Baidu said in an emailed statement on Monday.
Baidu has about 80 percent of the search market in China --
a nation with almost half a billion Internet users and still
only about 30 percent penetration -- after Google left mainland
China in a high-profile fallout with Beijing over censorship.
Bing -- which filters out results in China relating to
controversial subjects, such as political dissidents, Taiwan or
pornography, to be able to operate in the country -- has a
negligible share of the market, while Google has nearly 20
percent counting visits to its offshore sites.
Baidu spokesman Kaiser Kuo said Bing was not submitting to
any further censorship or restrictions on its English search as
a result of the deal "than they already do". Microsoft had no
immediate comment beyond confirming the partnership.
Google is losing share to Baidu but is still number two in
China. Worldwide, Google runs about 84 percent of Web searches,
followed by Yahoo with 6 percent and Bing with 4
percent, according to analytics firm Net Applications.
"Google has potentially shot itself in the foot when it
comes to cooperations in the Chinese market," said Daniel Knapp,
analyst at media industry research firm Screen Digest.
"Chinese local players like Baidu would be very wary about
striking up a relationship with Google, a rogue authority in the
eyes of the Chinese authorities. Microsoft has always been very
diffident -- for Baidu it's much safer," he added.
The new tie-up, due to be launched later this year, builds
on existing cooperation between Baidu and Bing on mobile
platforms and page results.
Baidu is beginning to diversify from its core search
business to compete in the fast-growing segments of mobile and
social networking. It also has a
Japanese search service that is currently loss-making.
Search engine marketing company Greenlight said it saw the
deal as positive for both sides, and could envisage the new
partners dominating the Chinese search-advertising market.
"Whilst it represents an opportunity for Bing to make more
money from the Chinese market, Baidu gets what it needs to
expand overseas when it is ready to do so," said Greenlight
Chief Operating Officer Andreas Pouros.
"Microsoft has entered the Chinese market slowly and has
made some friends, in a way that the Chinese government will
have no issue with. This should leave Baidu and Bing to control
the Chinese search ad market without too much difficulty."
Baidu made $1.2 billion in online marketing revenues last
year, up 78 percent from 2009. Microsoft's total online
advertising revenue in fiscal 2010, including a small
contribution from Bing, was $1.9 billion.
Some analysts were sceptical over how much demand there
would be for English search on Baidu.
"It's a good thing, but I see very minimal impact for Baidu.
I don't see a lot English keywords going through Baidu. It goes
through Google," said Wallace Cheung, a Hong Kong-based analyst
at Credit Suisse.
(Additional reporting by Melanie Lee and Samuel Shen; Editing
by Matt Driskill and Louise Heavens)