China's state news agency launches search engine

February 22, 2011 By JOE McDONALD , AP Business Writer

(AP) -- China's main government news agency launched an Internet search site Tuesday, giving its own sanitized view of the Web following Google's closure of its China-based search engine last year over censorship.

The Xinhua is operating http://www.panguso.com in partnership with state-owned China Mobile Ltd., the world's biggest phone carrier by subscribers.

The venture gives the ruling Communist Party a new tool to try to control what China's public sees online. Industry analysts say it might be commercially viable, drawing on Xinhua's news report and China Mobile's vast subscriber base, but is unlikely to challenge local industry leader Baidu Inc., which has more than 75 percent of China's search market.

Xinhua and China Mobile announced the venture in August after Google Inc. closed its China-based , saying it no longer wanted to comply with Chinese censorship and complaining its e-mail service was hacked from China.

Xinhua said it hopes to make Panguso one of China's leading search engines.

"We would like to fully exploit the advantage of Xinhua as an official agency having a large collection of news and information, and that of China Mobile in terms of technology, advanced operation principles and strong infrastructure," said Xinhua president Li Congjun in a statement released by the agency.

China has the world's biggest population of Internet users with 457 million people online as of Dec. 31, and 303 million people searched the Web by mobile phone last year, according to a state-sanctioned industry group, the China Internet Network Information Center. says it has more than 589 million accounts.

Beijing promotes Web use for business and education but its extensive filters bar access to material deemed pornographic or subversive. Search engines in China are required to exclude results of banned sites abroad.

Panguso, available on both Web and mobile phone, appears to filter even more stringently than other Chinese sites.

A search on Panguso for Liu Xiaobo, the jailed activist and Nobel Peace Laureate, returned no results. A search on Baidu turned up Chinese-language commentaries criticizing Liu.

Searches on Panguso for the Dalai Lama turned up tourism information for Tibet, followed by commentaries from Chinese state media criticizing the exiled Tibetan leader.

And Panguso has politically embarrassing gaps. It returned no result in a search for the website of People's University in Beijing, the first university founded after the 1949 communist revolution and one of China's most prominent institutions.

Baidu claimed a 75.5 percent share of China's online search market in the final quarter of last year, according to Analysys International, a Beijing research firm. Google was second but its market share fell to 19.6 percent, down from 30.9 percent before the closure of its China search engine.

China's mobile phone-based search market is more fragmented. Baidu leads with 34.3 percent but local rivals such as Easou.com also have double-digit market shares.

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