The People’s Search Engine

While advocates of net neutrality in the U.S. are wringing their hands this week over whether Google and Verizon are too closely aligned, the Chinese government — which owns the world’s largest wireless carrier, China Mobile — just announced plans to enter the country’s fast-growing search market.

As The New York Times‘ David Barboza reports:

State-owned China Mobile — the world’s biggest cellphone carrier — and Xinhua, China’s official state-run news agency, signed an agreement Thursday to create a joint venture called the Search Engine New Media International Communications Co.

China already has the world’s largest number of Internet users, more than 420 million, and also the largest number of mobile phone subscribers, more than 800 million …

Analysts say Beijing is pushing state-run companies to take a more active role online. China Central Television, the nation’s dominant broadcaster, is trying to develop its own online video site. Xinhua News Agency is trying to build a global platform of news providers using television and the Internet. 

Search is one of a handful of sectors in China wholly dominated by private companies. Most of today’s state-steered behemoths, like PetroChina and the Agricultural Bank of China, got their start in a bygone era, well before the Internet. China Mobile, launched in 1997, is one of Beijing’s few recent blockbuster government start-ups.

At present, Baidu, the decade-old search giant headquartered in Beijing and registered in the Cayman Islands, commands a hefty majority of the Chinese search-advertising market, about 70 percent. Baidu CEO Robin Li has been increasingly in the international limelight — including a round of high-profile interviews with western media outlets last week. Baidu launched in 2000 and rivals, including Google, which entered the Chinese search market later have had trouble catching up. (Even before recent political troubles ensued, Google trailed Baidu significantly in China.) Today there’s no guarantee that a state-run enterprise will be any luckier in dethroning Baidu, without under-the-radar help.

The question of why the Chinese government wants to enter the search market now — whether primarily for control or profit, or both — is left to speculation. Does Beijing worry about its future ability to impose effective censorship mandates on private companies like Baidu, which so far has been pretty compliant? Do they see an opportunity to make big bucks? Baidu’s Li, like Google’s founding duo of Page and Brin, is now a multi-billionaire — and the Chinese search market has plenty of room to grow, with just a third of the country now online, by Li’s estimate.

Beijing never makes it a point to fully explain its intentions. Xinhua‘s Vice President Zhou Xisheng told the New York Times simply that the government’s search engine plans were: “part of the country’s broader efforts to safeguard its information security and push forward the robust, healthy and orderly development of China’s new media industry.” An inscrutably all-purpose answer.