But Baidu must contend with other players keen on winning over the more than the 100m Chinese Web surfers. Less than a week after Baidu's big day at the market, Yahoo bought a 40% stake in China's second-largest online retailer, Alibaba.com, for $1bn in cash, hoping to capitalize on the latter's 14m users in a renewed bid to focus on its search business. In the largest deal to date for a Chinese online asset, Yahoo would fold its Chinese operations – including search – into Alibaba, a move that analysts say would help to give Yahoo the exposure it needs to become a dominant player in China.
Google has also recently picked up its expansion pace in China, signing on three companies – China Enterprise, China Source and Hotsales – to sell price-per-click keyword advertisements for its China site. Google also announced it would open an R&D center in China this year. The plan, part of a strategy to build research centers worldwide to learn how its offerings can be better adapted to different cultures, could hit some road bumps if Microsoft has its way. The US software giant is suing its former executive Lee Kai-Fu who has been tapped by Google to run its new research center.