Chinese Search Engine Market to Consolidate

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Chinese Search Engine Market to Consolidate
    BEIJING, Sept. 5 /Xinhua-PRNewswire/ -- Analysys International's upcoming
"Internet Search Engine Focus Report 2005'' provides in-depth analysis and
research on search engine business models and future developments in the
industry.  In the wake of Baidu's debut on the US stock market and Google's
formal entry into China, the competitive landscape of the domestic search
engine market will shift dramatically.  Our report will highlight the changes
discuss the implications for the industry.  As of the second quarter 2005, the
market share of the main players is as follows: Baidu 37%, Google 23% Yahoo!
(including 3721)21% respectively.  Others such as Sogou 13%  (Data source:
Analysys International's Search Engine Focus Report 2005)
    (Chart: http://www.analysys.com.cn/pm/market_share_20050905.gif )
    Based on their experience with the needs of local users, and their skills
in fulfilling these needs as well as being backed by serious financial
resources, Baidu will continue to hold the lead in the foreseeable future.
However, after Google's comprehensive China strategy bears fruit, it will
become a threat to all domestic players, by leveraging its strong lead in R&D
and its continuous creativity in applying its technology to new applications.
Smaller players will suffer most from this development and will seek to
improve their competitive position.
    Searching is currently the most frequently used Internet service.  The
search engines function as a gateway to larger information resources on the
Internet makes them an ideal platform for targeted advertising.  Providing
general services, market leaders such as Google and Baidu currently dominate
large shares of the market.  In the future we expect the needs of users to
become more fragmented and specialized.  Based on this trend we expect
specialized search engines that target profitable niches to attract increasing
attention from users and the investment community.
    In addition, Analysys International believes that search engine providers
will not limit themselves to information retrieval and continue to integrate
other technologies, services and business models, such as BLOGs, online
payment, digital music, online pictures.  These areas provide additional
growth opportunities and lay the foundation for next generation Internet
applications and services.
    Next generation search engines will dramatically improve the user
experience by implementing advanced User Interface technology and multimodal
interaction.  Another focal point of search engine evolution will be Natural
Language Processing, which currently proves to be the main obstacle in making
the resources of the Internet accessible to everyone.  With these improvements,
Analysys International believes, next generation search engines will truly
become a gateway to the Internet that challenges the traditional portal model.
With Chinese 'Netizen's' to reach 134 million in 2005 (including 37 million
broadband subscribers) and the expected continuous growth of the domestic
economy, the Chinese market will prove very lucrative and attract even more
attention.
    Analysys International believes that in the current search engine market,
local providers, especially ones such as Baidu and Sogou still face many
restrictions and obstacles: The dispute about intellectual property rights and
music copyrights in applications provided by many local search engines
highlights the inherent challenges of their business model (often the lack of
a sustainable business model).  Confronted with the entry of multinationals
such as Google, Yahoo it will become difficult for smaller local players to
compete successfully.  Analysys International will discuss these and other
challenges during the Analysys International Symposium 2005 to be held on
December 8th.

    For more information, please see http://english.analysys.com.cn .

    For more information, please contact

     Cindy Zhang, Overseas Media Manager,
     Analysys International
     Tel:    +86-10-6466-6565 x219
     Fax:    +86-10-6466-7102/7103
     Mobile: +86-139-1158-0822
     Email:  cindy_zhang@analysys.com.cn
SOURCE Analysys International
http://english.analysys.com.cn
http://www.analysys.com.cn/pm/market_share_20050905.gif
CONTACT:
Cindy Zhang, Overseas Media Manager of
Analysys International, +86-10-6466-6565 x219, or fax,
+86-10-6466-7102/7103, or mobile, +86-139-1158-0822, or
cindy_zhang@analysys.com.cn