Microsoft's
websites in China will include sponsored search results from
Baidu, the
country's largest internet search firm, in an alliance announced over the
weekend.
The deal illustrates the strength of Baidu's ad sales team in China's paid
search advertising market, compared to Microsoft's weakness.
Users of Microsoft's Chinese websites, which include
MSN China,
Windows
Live and other partners such as
China
Telecom, will now see Baidu's paid links mixed in with Microsoft's standard
search results.
Baidu's popular search engine is funded mainly by paid search results which
appear above non-paid listings. Advertisers pay Baidu a few cents each time a
user clicks on one of the paid listings.
Income from clicks on the links featured on Microsoft's sites will be shared
between Microsoft and Baidu. The financial terms of the deal were not revealed.
Baidu's share of China's internet search market is generally estimated at
over 50 per cent, and as high as 70 per cent.
The only other significant competitors in this market are
Google and
Yahoo, while
Microsoft's share appears to be too small to be measured.
The company does have a measurable minority share in some Chinese online
markets, such as instant messaging and blogs.
"We expect this partnership to expand greatly our revenue from the paid
search listings," said Baidu spokesman Xu Jiye, according to the
Shanghai
Daily.
A Microsoft China executive added: "China is one of our most important
markets. The strategic alliance with Baidu will help us provide new
opportunities for advertisers, which will further enhance our search business in
China."
Baidu has faced accusations of click fraud related to its sponsored search
results placements during the past year.
A small number of advertisers have complained that they are paying for
nonexistent clicks, or paying for clicks from people who have no intention of
buying their products and services.
However, Baidu executives have pointed out that none of these accusations has
resulted in any formal legal action, much less been proven in court.
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