China Mobile, the world’s largest mobile phone operator has announced that it has signed a framework agreement with the nation’s official Xinhua news agency. The two companies are planning to collaborate on setting up a search engine. China Mobile had approximately 554 million subscribers at the end of June. After the announcement regarding the search engine project, the company’s shares recorded a 2.5 percent growth finally reaching 84.15 Hong Kong dollars ($10.8).
“Called ‘Search Engine New Media International Communications Co.,’ the joint venture will focus on creating a leading search engine while actively developing other businesses, including the internet, print media and advertising”, said Zhou Xisheng, vice president of Xinhua, at a signing ceremony. “Search engines, which have powerful information integration abilities, play an increasingly important role in disseminating information and influencing public opinion,” he said.
Google, the biggest search engine in most parts of the world, encountered a lot of problems in China due to a battle over censorship and cyber attacks in Beijing. As Google’s share in the country dropped to 24.2 percent in the second quarter of the year, from 30.9 percent in the first quarter, Baidu, a Chinese search engine and rival to Google recorded a market share of 70 percent, achieving considerable growth from the first quarter when it had recorded 64 percent.
China’s search market was worth approximately 2.67 billion yuan (394 million dollars) in the second quarter of this year, also recording a growth from the same period last year. Unfortunately for Google, it’s slowly being forced to back down from what’s probably the world’s biggest Internet search market, currently consisting of 420 million users.
In March Google shut down its China based search engine due to a series of attacks to e-mail accounts of Chinese human rights activists. The attacks were assumed to be measures against the freedom of speech of the activists. For a short period of time Chinese users couldn’t access the Chinese version of Google. During that period a competing search engine owned by Baidu Inc. recorded enough growth to establish itself as the leader on the Chinese market. Google eventually became available again once its internet license was renewed. China is one of the most conservative and restrictive countries with rigid rules regarding censorship, despite the large number of Internet users. Throughout the last period China has banned a large list of blogs, social networking sites and various other websites including Facebook, Myspace, YouTube, Flickr, Tripod, Technorati, Blogspot blogs, Picasa, Webshots, Twitter, Hotmail, Google and Gmail, Yahoo, Imageshack, DropBox and Foursquare, so basically all of the social networking sites we know and love as well as most of the search engines and image hosting sites. Some of the sites mentioned before are still blocked; others were blocked for certain periods of time and then unblocked.
Now that China Mobile and Xinhua will set up the new search engine, the Chinese government can rest assured. Zhou Xisheng has also mentioned how important it is to set up the 
joint venture as a part of the country’s broader efforts to safeguard information security and push forward the “robust, healthy and orderly” development of China’s new media industry. In order for the search engine to offer quality services to customers from China and abroad, the joint venture will make use of advanced search technologies and recruit world-class talent. This is not China Mobile’s first partnership with Xinhua. The two companies have also co-operated on providing mobile news and audio-visual programs to customers.
