Microsoft is planning to announce a new strategic deal with Chinese search engine Baidu, according to reports.
The software giant is expected to close a deal soon with Baidu according to sources who spoke to DoNews.com. Details of the deal are not immediately available but it’s thought that Baidu will take control of the paid advertising on Bing’s Chinese site. Baidu is expected to use Bing’s search results for its English language version. Baidu currently dominates the Chinese search engine market with 75.8% market share. Google China holds 19.2%, leaving just 5% for other search engines like Bing.
Microsoft’s Bing search engine has been making significant gains in the U.S. market recently. Bing now accounts for 14% of all U.S. searches. LiveSide notes that Baidu and Microsoft entered into a similar strategic partnership in 2006. The previous agreement centred around Baidu’s paid search listings, allowing them to appear on the search results pages of Chinese versions of Microsoft web sites like MSN and Live Search (now Bing).
Microsoft clearly wants to strengthen its market share in China. Google threatened to pull out of China after a gmail cyber attack in late 2009. Google eventually backed down but the outburst has soured relations between the search giant and China. Microsoft could use this to their advantage to pick up market share in a vital market.