In China, a Google-killer looks to solidify its gains

In the US, Google's search dominance is a foregone conclusion.

But in China, home to the largest Internet audience in the world, Google has long been edged out by Baidu, which consistently garners the lion's share of the search market. Now, with the wind at its back, Baidu will seek to expand its reach. According to a new report from Bloomberg News, Baidu is considering buying web businesses outside the search market – a move that would bolster its presence both in China and in Japan, where Baidu began operating last year.

“People approach us and we get to look at a lot of things,” Chief Financial Officer Jennifer Li told Bloomberg News. “Internet is at an early stage of its development. It’s dynamic, and we need to stay ahead.”

Through the looking glass

It's been a very good year already for Baidu. In early June, iResearch Consulting group reported that Google had actually decreased its market share in the first quarter of 2009, from 23 percent to 20.9 percent. At the same time, Baidu climbed from 72 percent to 74.1 percent – a modest gain, but enough to snag headlines around the world.

Meanwhile, iResearch has predicted Baidu will continue to snatch up market shares over the next quarter, eventually breaking 1.6 billion yuan in revenue.

The threat at home

Even as Google continues to dominate the search engine race in the US, several threats to the company's dominance have emerged in recent months. Last month, for instance, comScore reported that Bing, Microsoft’s new search engine, was steadily increasing its share of search result pages in the US – a good gauge of overall search intensity.

“It appears that Microsoft Bing has continued to generate interest from the market for the second consecutive week,” Mike Hurt, comScore senior vice president, said last week. “These early data reflect a continued positive market reaction to Bing in the initial stages of its launch.”

Meanwhile, a group of start-ups have made major gains on the real-time search front, a field where Google has traditionally lagged. Last week, CrowdEye and Collecta both launched to generally favorable reviews; they join a field that includes OneRiot, Topsy, Tweetmeme, and Scoopler.

---

For more from the Horizons blog, follow us on Twitter.