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TheStreet Open House

Microsoft Strikes Search Deal With Baidu

Stocks in this article: BIDU MSFT GOOG

Baidu (BIDU), China's biggest search engine by revenue, on Monday announced a partnership with Microsoft (MSFT) that would allow its users to see English-language search results generated by Bing, the U.S. company's search engine.

No financial considerations were involved in the deal, which will see Bing's search results labeled and integrated into Baidu's search results from later this year.

Any advertising revenue generated as a result of the improved search results will go to Baidu as it controls the site. However, the deal will help Microsoft promote Bing in the world's biggest Internet market, where it has less than a 1% market share, according to research firm Analysys International.

By contrast, Baidu controls more than three-quarters of the Chinese market while Google (GOOG) still holds 19.6%, despite losing market share after the U.S. company partially retreated from China last year. Google moved its China Web search to its Hong Kong site last March after confronting Beijing over censorship issues.

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The partnership between Baidu and Bing highlights Microsoft's different approach to the Chinese market compared with Google. Unlike Google, which had operated its own search engine independently in China, Microsoft had sought out local partners to help promote Bing.

Microsoft had earlier entered into an agreement with Alibaba Group, the business-to-business Web site, to offer Bing search results on Alibaba's eTao search engine. However, that partnership ended earlier this year.

Samuel Shen, senior vice president of Microsoft China, said the partnership "would give Baidu's many users better results and a better English search experience. At the same time, it will allow more Chinese users to experience Bing."

For Baidu, the partnership helps it expand beyond its traditional strength in Chinese-language searches. English-language searches were becoming more common in China as more people there learnt English as a second language, a Baidu spokesperson said, adding that there were already more than 10 million English searches on Baidu every day.

The bolstering of its English-language search is part of Baidu's quest to transform its search function into a sort of computing platform that could handle anything that future Internet users will need to do online. Two weeks ago Baidu announced plans to acquire a majority stake in Qunar, China's biggest online travel agency by revenue.

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