Baidu Tests Web Browser as China Search Leader Expands Range

China’s leading search engine is said to have developed a personal web browser currently being tested internally. This development may put Baidu in competition with Microsoft and Google in the future.From Bloomberg News:

The desktop browser is being tested internally among employees at present, Baidu spokesman Kaiser Kuo said in an interview today. The new service “dovetails” with the company’s “box-computing” technology, he said, without disclosing when it will be offered to the public.

The browser may put Baidu in direct competition with Microsoft Corp. (MSFT)’s Internet Explorer and Google Inc. (GOOG)’s Chrome. Chief Executive Officer Robin Li is expanding Baidu in social- networking and online videos after the Beijing-based company took search-engine market share from Google in China, the world’s biggest online market.

Baidu has grown ever since Google effectively left the China market last year because it refused to censor search results. From Bloomberg Businessweek:

Google’s exit brightens an already bright Baidu picture. With its only serious rival having hobbled itself, Baidu will now enjoy near-monopoly status in China’s Chinese-language search category. Of the company’s remaining competitors, “none of them has over 1% market share,” says Paul Wuh, an analyst in Hong Kong with Samsung Securities. That puts Baidu in command of a small, but fast-growing market. Spending by advertisers on search in China totaled just $1 billion in 2009 and will be worth $4.9 billion by 2015, he estimates. Almost all of that will belong to Baidu, says Wuh, who expects the company’s market share to jump from its current 65% to over 90% within two years.

Baidu’s move seems to foreshadow its intent to expand into new markets and niches. News of its expected expansion, including to mobile devices, has led to a surge of Baidu’s stock price this week. From Bloomberg News:

Baidu’s American depositary receipts rose 1.1 percent to $134.92 as of 4:30 p.m. in New York, the highest closing price on record. The shares have risen for five straight days, bringing the weekly gain to 12 percent, the most in six months.

Interesting to see if Baidu’s strategy will be as successful as many speculate.

Read here for more on Google’s recent conflicts with the Chinese government.

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