Who's the real winner in the brawl between

Google

(GOOG) - Get Report

and

Baidu.com

(BIDU) - Get Report

?

It might be

Sina

(SINA) - Get Report

.

On Thursday, Google trumpeted recent gains it has made in the Chinese search market. Google's market share grew 4% to about 23% during the second quarter, according to research firm Analysys International. Baidu's market share rose only 1% to 58% over the same period.

"We are closing the gap with them (Baidu)," Rebecca Kuei, Google's head of sales and business development for Taiwan and Hong Kong, told Reuters.

But it's Sina -- which announced a partnership to host Google's search in June -- that may be the best bet for investors looking to take advantage of the intensifying rivalry between Google and Baidu.

Despite Google's bragging, Baidu's advantage remains impressive -- and that could likely lead to Google showering even more cash onto the already well-positioned Sina.

Want more? Check out TheStreet.com TV video. Vishesh Kumar discusess Sina's emergence.

In fact, looking closer at Google's claims, they're not as impressive -- or damaging to Baidu -- as they might seem. The search giant started off with a smaller share of the market to begin with, so making gains would be less difficult.

And given that Baidu continued to pick up even more of the market despite its already impressive share, the gains likely came at the expense of other smaller players.

That means the picture remains unchanged for both Baidu, which continues to dominate in China, as well as for Google, which continues to trail Baidu by a wide margin.

TST Recommends

But Google seems pleased with the performance of its partnership with Sina, so much so that the search giant says it will try to partner with local players all through Asia. And Google's typical generosity in these situations, combined with a hint of desperation, could lead to an unexpectedly lucrative scenario for Sina.

The details of Google's agreement with Sina aren't known. But Google doesn't hesitate to shower money on its partners if it thinks it will lead to a bigger share of the search market. In 2006, it guaranteed $900 million over three years to

News Corp.'s

(NWS) - Get Report

MySpace social networking site to host is search.

Given Google's fondness for the arrangement, the Sina deal seems to be bringing in a good clip of searches. And Google generally sends the lion's share of the revenue to its partners. If

Yahoo!

(YHOO)

outsourced its search to Google, it could likely keep nearly 90% of the revenue from each search, investment bank Bear Stearns estimated in September.

With Google's desperation and Sina's popularity -- it's the most visited site in China -- the split could be even more generous to Sina. Google is expected to grow earnings at a rate of 30% a year for the next five years. And capturing an increasing share of the red-hot Chinese market will be a key priority in order to accomplish this.

Pacific Crest Securities analyst Steve Weinstein doesn't see the Google search deal hitting Sina's bottom line until the fourth quarter. But bullish comments by Sina management -- as may be expected, given how pleased Google is -- could help push its shares higher even before then. Pacific Crest makes a market in Sina shares.

Even beyond Google, however, Sina has a lot going for it. Advertising momentum continues to be strong at the company, and a move in September to share ad revenue with top bloggers on its site is promising, given advertiser receptivity so far. And analysts note that the company is on track to deliver a strong third quarter.

And while Sina isn't cheap, it's still enticing at current levels given its growth prospects and how its peers trade. Shares of Sina, which closed at $48.09 on Thursday, trade at 33 times forward earnings and have a price-to-earnings-to-growth (PEG) ratio of 1.98.

That's not nearly as heady as Baidu, which trades at 84 times forward earnings and has a PEG ratio of 2.6.

Even rival

Sohu.com

(SOHU) - Get Report

, which lags Sina in traffic, commands about the same P/E multiple, and has a PEG ratio of 2.3.

With its prime position in the hot China market -- and with Google knocking at the door for a way in -- Sina could easily see and deserve a loftier valuation.