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Microsoft eyes China's search market

After narrowing its gap with search giant Google Inc in the US market, Microsoft Corp's Bing has begun to set its sights on China, where it is expected to expand its market share by marketing, enhancing local cooperation, and integrating social and mobile platforms, company officials said.

After three years of development, Bing has surpassed Google in terms of English-language searching capability, Microsoft officials said. This month, a blind test, in which users decided which search results were better, showed that more than 66 percent of users preferred Bing, according to Harry Shum, Microsoft corporate vice-president.

The US market share of Microsoft and Yahoo, whose search-engine services are also provided by Bing, was 28.7 percent in August, while Google's share was 66.4 percent, according to ComScore Inc.

Shum said Bing is ready to compete with Baidu Inc and Google in China, not only in Chinese-language search services but also in English-language searching, on personal computers and mobile devices.

Bing China recently launched a new version that claims to provide a better English-language search service. The strategy aims to attract high-end Internet users, who deal with English information more than others - the same group that uses Microsoft's messenger service.

"As far as I know, more than 5 percent of search content on the Internet in China is in English, but major players in the Chinese search market such as Baidu are not doing well or do not want to do well because the Chinese search service is already very big," Shum said.

"Backed by Microsoft and Bing in English-speaking countries, I believe we can provide a better English search service."

At the same time, Bing in the United States also announced some new features, such as a dynamic homepage, and connections with major social networking websites including Facebook, Twitter and Yelp.

Shum said Bing is still looking for the best suitable social networking site in China to work with.

According to Beijing-based research company Analysys International, Baidu dominated the search market with a 78.6 percent of the market share in the second quarter of 2012. Google's share dropped to 15.7 percent. Bing, which went on line in 2009, has a market share of less than 1 percent.

Dong Xu, an analyst with Analysys International, said Bing can still attract more attention from users by providing an English-language search service.

However, Dong added that this strategy will not change Chinese users' search preference for Baidu.

"Among all the competitors in China, the Baidu brand is quite popular, and this is a situation which cannot change easily," Dong said. "At the same time, Baidu has established cooperation with lots of websites that all choose Baidu as their search-service provider.

"For a long time, it will be very difficult to get Chinese user to adopt another search service as their first choice, especially on personal computers," added Dong.

Even though the situation in China is quite challenging, Microsoft's Shum said Bing China is quite confident.

Although Shum declined to elaborate, Microsoft's investment is increasing.

Microsoft plans to hire 1,000 additional employees in China and increase its investment in the fast-growing market by 15 percent in the current fiscal year, the Wall Street Journal reported.

"Microsoft pays a lot of attention to Bing because a search service is the best way to collect specific demands from Internet users," said Dong.

"Besides, search advertisements are more profitable than selling software products."

Shen Zheyi, an analyst with Gartner, an international information technology research company, said Bing, despite its low recognition among Chinese users, is the only search engine that can compete with Baidu and Google in terms of search quality and user experience.

"Backed by Microsoft, Bing has quite some potential ... Many Chinese search engines are competing with each other, but only one can provide something that Baidu cannot do well," said Shen.

"Bing's effort in the English search service proves that it has its own advantages." But Bing has to do more and do it quickly in terms of expansion, especially in mobile devices and local cooperation, Shen added.

"I think Bing has more opportunities in mobile devices than personal computers. For example, Windows phones will help Bing reach more mobile users," said Shen. "But because its user base is relatively small (compared with Andorid and iOS), Bing should cooperate more with local manufacturers such as Lenovo and local Internet companies."

Dong from Anaylys International echoed that opinion.

"Search engines that want a piece of Baidu's market share have to attract users in different ways. For example, Tencent's search engine attracts more users by inserting services into the popular instant messenger QQ," Dong said. Shum said he is confident about Bing's future on mobile devices.

He said in the next year, there will be 400 million devices, includes computers, laptops, and mobile phones, running the Windows operating system, and all of them will adopt Bing as their search engine. Among those devices, growth from mobile devices is faster than it is on personal computers.

However, the business model of search services on mobile devices is not quite clear, given the screen is smaller. Shum said in the future, search services on mobile devices will be quite profitable if companies can balance well-customized service and privacy protection.

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