Alphabet Inc (GOOG)

[SeriousMoney]

Google to Unveil Tie-Up in China Pact With Video Site Comes as Search Firm Seeks to Extend Reach
WSJ.com, January 5, 2007

BEIJING -- Google Inc. is expected Friday to announce a partnership with a Chinese software provider as part of the company's bid to extend its dominance beyond Internet searches to other online services.

Jackson Zhang, spokesman for Xunlei Network Technology Co., which provides video and game downloads, said the company is forming a strategic partnership with Google to be announced at a news conference Friday. A Google spokesperson confirmed the company is jointly hosting the event, but declined to comment further.

State-owned China Daily reported Thursday that Google is joining up with Shanghai-based venture-capital firm Ceyuan Ventures to buy a stake in Xunlei. According to Shenzhen-based Xunlei's Web site, the four-year-old company is one of China's largest providers of video-downloading services. The company has 54 million subscribers, estimates Beijing-based Internet-research company iResearch Consulting Co.

Separately, Google China on Thursday said it was teaming up with China Mobile, the nation's largest mobile-telecommunications carrier, to provide online-search services for cellphones. Google said trials of the mobile search service started in December and will be launched soon across China. The effort echoes Google's move to offer mobile services and sell related advertising elsewhere.

Google, the world's largest search-engine provider, has been looking to broaden its Internet presence globally. In October the company agreed to buy U.S.-based online-video-sharing company YouTube Inc. for about $1.8 billion in stock, a move that could at one stroke make Google a leader in the fast-growing online-video market.

Yet U.S.-based Google has had difficulty extending beyond its dominant English-language search site to sites in other languages around the world, where local competitors are enjoying linguistic and other home-grown advantages.

In China, the second-largest Internet market after the U.S., Google is a distant second behind Baidu.com Inc. According to iResearch Consulting, Google held a 19.2% share of China's market for Internet searches in the third quarter, compared with 63.7% for Baidu.

Hou Tao, an analyst at iResearch Consulting, said a potential alliance between Google and Xunlei is a "win-win deal for both sides." By combining download services with search capabilities, both parties stand to grow, Mr. Hou said.

Gaining dominance in China's Internet-search space is difficult, because an estimated 70% of China's Internet users don't access Internet-search sites directly, said Bill Milewski, chief financial officer of Chinese search engine Bbmao.com. Instead, most Chinese users employ search tools featured on other Web sites, such as games or news portals, he said.

http://online.wsj.com/article/SB116793563237767297.html?mod=yahoo_hs&ru=yahoo