Baidu now has competition from Beijing

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If you thought Google had trouble in China once the government started filtering its search results, even worse news could be ahead for leading local search hub Baidu. State-run news agency Xinhua just opened its own official search engine in cooperation with China Mobile ( CHL , quote ). Search results are apparently filtered to better serve the interests of Beijing: controversial topics do not show up, while others are diverted to relatively innocuous sites. Not really going to get the best search results on politics, right? GOOG ( quote ) left the country last year over what appeared to be a demand to similarly sanitize its results for the Chinese government's political comfort. At the time, the situation favored Baidu ( BIDU , quote ), which quickly grew to capture 75% of all of China's sprawling web search traffic. As it is, BIDU and GOOG still have roughly 95% of the Chinese search market wrapped up between them -- leaving the dregs to a multitude of also-ran names reminiscent of the U.S. "portal" crowd circa 1998 -- but the weight of official sponsorship means a lot in China. The reach of CHL on the mobile platform is also a significant advantage, given the relatively splintered nature of phone-based search. Currently BIDU only has a 34% share of mobile search, and getting the new site Panguso on all of China Mobile's phones can easily help a newcomer ramp up share quickly. Mobile phone users will also be able to tap into Panguso directly and send search results to their PCs via SMS. A positive for CHL which has an interesting chart (long term). BIDU shares are down over 4% today in ADR form and are likely to decline in Shanghai tonight in sympathy.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , International , Stocks

Referenced Stocks: BIDU , CENT , CHL , GOOG

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