China's Baidu fends off new rival in search market turf war

Rival Qihoo 360 has launched a competing search engine in China that could take market share from Baidu

Baidu's dominance in China has been the target of a new search engine in the nation that has led to a turf war between it and local firm Qihoo 360, with search results and page redirects sparking the dispute.

While companies including Google have tried to expand into China's search space, Baidu has long controlled the market, with market share hovering at around 80 percent, according to Beijing-based research firm Analysys International.

But earlier this month, a new competitor entered the market, with Beijing-based Qihoo 360 Technology launching its own product. The launch of the service instantly attracted attention in China's tech sphere, with observers stating it had become the nation's number two search engine, albeit with a still small market share.

Qihoo 360's search, however, has drawn controversy for not merely being a search engine, but an aggregator accused of taking search results from Baidu, Google and other competitors. Qihoo 360 offers so-called "comprehensive search," while also integrating other rival search engines into its search bar, making it easy for users to switch between them.

Baidu has remained silent on the issue, but the company appeared to act on Tuesday night. Users who clicked on a Baidu product site displayed in Qihoo 360's search results were instead redirected to Baidu's homepage, the search effectively disrupted.

In response, Qihoo 360 has redirected Baidu links with cached page views of the sites. On Wednesday, the company also issued a statement on an official microblog, which said Qihoo 360 had spent seven years developing its own independent search engine. More than 13,000 servers run the search engine, which indexes a billion Web pages a day.

"We believe a monopolized market leaves no benefit for anyone," the company said. "We also believe it's useless to criticize the monopolizer. The only effective way is to compete in the market."

Outside of search, Qihoo 360 is a major provider of security software in China, and also offers a popular Internet browser, with a 27 percent market share, according to analytics site CNZZ.com. But the company is also well-known for being involved in major disputes with Chinese Internet firms, with some accusing Qihoo 360 of competing unfairly. In 2010, Baidu sued the company for alleging that some of its software was malware.

Qihoo 360 does have potential to take a "significant share" of China's search traffic, given the popularity of its Internet browser and Web directory site in China, said Mark Natkin, managing director for Beijing-based Marbridge Consulting. By combining results from Google, Baidu and others, it can offer the most optimized search results for Chinese users. But a challenge the company faces is maintaining access to other search engines' results, he said.

Another challenge could be possible lawsuits. Zhao Zhanling, a legal expert on China's IT law, said Qihoo 360's search infringes on Baidu's intellectual property by allegedly stealing Baidu's search results for its own gain. Baidu could also sue the company for competing unfairly, since its unclear how much of Qihoo 360's search service relies on its own resources, and that of its competitors.

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Michael Kan

IDG News Service
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