Chinese search engine rivalry intensifies

China's Internet search service rivalries intensified this week with giant Baidu Inc starting a battle with latecomer Qihoo 360 Technology Co, a fight analysts said would hurt both.

Since midnight of Tuesday, Internet users in China found that the country's largest search engine Baidu began to redirect links from Qihoo 360 search to some of its services like Baidu Know to its home page.

Several hours later, Qihoo 360 fired back by redirecting users to its cached pages of Baidu services and deleted all the default Baidu products on its aggregator website.

Qihoo 360, a provider of security and Web software in China, entered the massive search market on August 16 by launching its own search engine.

"We aimed to contribute to a safe and orderly search market as a healthy market competition instead of monopoly would benefit consumers as well as technology development," the company said in a statement e-mailed to the Global Times Wednesday.

"Over the past two years, with Google withdrawing from the Chinese mainland market in 2010, Internet users and advertisers have had complaints about the quality of search services, which called for more companies to join in the market," the statement said.

By August 22, Qihoo 360 search succeeded in grabbing 10.2 percent market share, according to independent data provider Hitwise. The market share puts it just behind Baidu and ahead of players like Google and Sogou.

In the competition for the search market, branding and good user experience are the biggest advantages of Baidu, You Tianyu, an analyst with Beijing-based research company iResearch Consulting, told the Global Times Wednesday.

However, Qihoo has its own edge. It has a large user base: About half of the Chinese Internet users, some 272 million, use its browser as the first choice when surfing online.

By using its security software to direct users to its aggregator website, where it can sell advertisements and links, the company can rake in money.

Blocking links from 360 hurts Baidu's search traffic, so "fierce fights like this may last for one to two weeks but couldn't be longer," You said.

"Besides, actions like blocking links create bad user experience and disrupt market order, which does good to neither company," he noted.

Kingsoft expert in anti-virus Li Tiejun commented on his Sina Weibo Wednesday that though redirecting links is an effective move by Baidu, it should be careful as in escalated spats, Qihoo 360 may use its antivirus software to prevent Baidu advertisements from being displayed.

"Qihoo may cut its links to Baidu when its users get used to using its search service, but this won't happen in the near future," You told the Global Times.

Baidu did not comment on the spat Wednesday. The company, holding some 78 percent of the search market in the second quarter, according to Analysys International, may further lose market shares to Qihoo in the next two quarters, Deutsche Bank forecasted, though a general belief is its leading role won't be challenged in short term.