(* Source:  Aydin Senkut via three Billion *)

Today China boasts over 105 million Internet users, not to mention 350M mobile users (growing by 57 million every year). By 2010, Chinese Internet users will outnumber US Internet users by 25%. Currently, 87% of the Chinese Internet audience uses search. And given Internet search’s dominance of monetization and audience rankings globally, the competition for the top spot in the Chinese search market is pretty intense.

Baidu, Google, Yahoo, Sohu and Sina are battling each other to be the leading provider of search in China. Currently the two largest search players, Baidu and Google, account for almost 90% of the searches (source: CNNIC Search Survey, 2006), per the latest local search market share depicted in the pie chart below.

Chinese Search Market

Though it doesn’t show up in the main search rankings, Tencent - the leading Chinese Instant Messaging (IM) platform with over 220M active users - has been making significant in-roads into this market by licensing Google’s search in 2005.

More than 3 out of every 4 Internet searchers in China use multiple search engines (source: CNNIC Search Survey, 2006). Therein lies one of the more interesting dynamics of this market: Baidu and Google clearly lead the field in all aspects of search, through the variety of searches they offer and the quality of their results. Sohu features more prominently in MP3 and video search, compared to its lagging ranking in web search. Yahoo, on the other hand, has been struggling with its local partnering strategy - as it failed to take advantage of large acquisitions locally, including 3721 and the much publicized Ali Baba. Indeed Yahoo's brand seems weaker in China compared to Google’s and other local players - as a result of its lack of focus (and differentiation).

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