Microsoft Signs Search Pact With Baidu in China
September 23 2015 - 7:33PM
Dow Jones News
By Robert McMillan
Microsoft Corp. and Chinese search giant Baidu Inc. have signed
a deal to make Baidu.com the default search engine and home page
for Web surfers in China who are using Microsoft's Edge
browser.
The deal, announced Wednesday, is one of seven new agreements
publicized this week as Microsoft seeks to make inroads into the
world's second-largest economy, and as China President Xi Jinping
gets set to tour Microsoft's campus in Redmond, Wash., Thursday
with company CEO Satya Nadella.
There are already hundreds of millions of PCs running Windows,
but because of widespread piracy, Microsoft has traditionally had
difficulties extracting revenue from many of these users.
The Baidu deal is designed to help Microsoft capture more users
for its new Windows 10 software. In exchange for the search
placement, Baidu will make it easier for its own customers to
update to Microsoft's new operating system. Internet users who
search for Windows 10 on the China search engine will be greeted
with a large banner advertisement on the top of their screens,
which will then take users to a special Windows 10 download site,
Baidu said.
Microsoft says it isn't giving up on Bing. But with a negligible
market share in the country, it makes sense for the company to play
down Bing to promote its more popular Windows software, said Danny
Sullivan, founding editor of website Search Engine Land.
"If Google can't win the search market in China, then Microsoft
can't," Mr. Sullivan said. "But there's a lot to gain by pushing
the Windows adoption."
With the deal, Baidu will fortify its grip on Web search in
China. More than 92% of Internet users in China turn to Baidu for
search, according to the China Internet Network Information Center.
Google, with 27%, is ranked fourth in the country, while
Microsoft's Bing is used by less than 2%.
In the series of announcements Wednesday, Microsoft said it
would also develop hybrid cloud-computing software with
Unisplendour Corp. and 21Vianet Group Inc., and build out a cloud
service for Xiaomi Corp., a maker of smartphones. The company also
announced deals with China Electronics Technology Group Corp.,
Shanghai Oriental Pearl Media Co., Sichuan Provincial Government,
and the Xi'xian New Area development zone.
Tensions between China and U.S. have flared up as of late, and
Microsoft has been caught in the middle on several issues, from
piracy to cyberspying and regulation. The company is the subject of
a continuing probe by Chinese regulators over suspected
monopolistic practices, and it continues to battle pirated versions
of its software. In 2014, China's Central Government Procurement
Center banned government agencies from purchasing computers loaded
with Microsoft's Windows 8 software.
President Barack Obama last week said he would press China's
leaders to prevent hackers from stealing U.S. corporate secrets.
Mr. Xi is expected to meet with Mr. Obama by week's end.
Write to Robert McMillan at Robert.Mcmillan@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 23, 2015 19:18 ET (23:18 GMT)
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