Microsoft gains on Google with Bing Baidu partnership

Microsoft has signed a deal with Chinese search company Baidu in a move which could help its Bing engine turn up the heat on Google in the largest search market in the world.

The companies said that Bing will provide the English language search results for Baidu from later this year. Further details of the partnership have not been announced.

Microsoft currently has no stake in the Chinese search market. Figures from Chinese internet tracker iResearch for the first quarter of this year suggest that Baidu has 74 per cent and Google 23 per cent.

Google became less competitive at the beginning of 2010 when the company moved its operating base from the mainland to Hong Kong because it did not agree with Chinese government censorship of search results.

Ovum analyst Mike Davis told V3.co.uk that the Microsoft deal with Baidu is likely to lower Google's penetration in the country further, but that this will not necessarily worry the web giant.

"Microsoft has obviously got one up over Google. While Microsoft will only serve results in English, which is only a small amount of Baidu search, this will increase as the Chinese population grows more affluent and more people learn English to travel abroad," he said.

Davis added that younger Chinese people are also learning English in school and tend to have more access to the internet, further increasing the numbers searching in English on Baidu.

The analyst agreed that Microsoft's strategy to compete with Google in the global search market should involve partnerships, such as those with Yahoo and Nokia, and now Baidu, but that Google is unlikely to be ruffled by the news.

"The English language results are small and, although China is one hell of a market, Google still has the rest of the world to play with," he said.

"Google also knows that it can't be internet king forever, which is why it has been diversifying with things such as Android and a growing number of applications.

"I don't think it is overly worried about losing its dominance as a search engine. By the time it happens, it will be making a lot of money from something else."

The Microsoft and Baidu partnership was first formed five years ago when Microsoft web sites in China started displaying sponsored search results from Baidu.