Search Engine Market to Consolidate

Search engine service providers launched a new round of attacks in the fiercely competing market on Friday - moves which could close the final stage of consolidations.
Baidu.com, the country's biggest search engine service provider, on Thursday held a Most Searched Brand and Entreprenuer award with Rupert Hoogewerf, CEO of EuroMoney China, trying to boost its influence among business leaders and young people.

Robin Li, CEO of Baidu, believed that with the searches of interested brands or entrepreneurs, people will find out their stories and spread the entrepreneurial spirit.

Baidu also released its hard disk search software on February 28, aiming to expand its search services from web search to hard disk search.

Zhongsou.com, another major player in the market, also released its desktop search software NetPig 3.0 version on Thursday.

"Desktop search has become a trend in the market, but who will be the leader in the market?" queried Chen Pei, president of Beijing-based Zhongsou.

He believed the development of search engine technology has entered the third generation, which has search results both on the web and computer hard disks and provides customized search services.

The Chinese Internet portal Sohu.com also upgraded its search engine website Sougou.com on February 25 - and vowed to become the leading search engine service provider in the country.

The US giant Yahoo!'s Chinese operation also said it would aim to become the biggest player in two years.

Henry Yang, president of the Internet industry research company Shanghai iResearch Co Ltd, believed the moves and remarks of companies like Baidu, Zhongsou, Sohu, and Yahoo! China reflect the intensity of the competition in the search engine market, which is almost fully consolidated.

"The market consolidation is almost done and the positions of some leaders are well established, so naturally some smaller players would seek other means to put themselves under the spotlight," said Yang.

According to an iResearch report on the Chinese search engine market, the business grew to 1.2 billion yuan (US$145 million) in 2004 with a 74 per cent year-on-year growth rate.

Baidu, Google and search services by Yahoo! China were the top three most popular search engines in 2004 with almost 85 per cent of the usage.

Yang pointed out that the technical barriers to the business are already quite high and the positions of a few major players are quite established, so small and medium players are facing mounting difficulties.

He said new technologies, such as desktop search software by Zhongsou and My Search software by 8848.com will bring some uncertainties to the competition in the market, but it will be very difficult for a new player to emerge just with new technologies.