it faces greater challenges from its Chinese rival baidu.com, which is taking up more and more market share in the Chinese search engine market.

According to statistics provided by International Data Corp. early this year, google.cn came sixth in terms of the number of website visits and baidu.com ranked third. In terms of online advertising, baidu.com took in $105.2 million in 2006, taking up 16.5 percent of the market share, while google.cn only sold $38.7 million, or 6.1 percent of the market share.

Xie Wen, senior Internet expert, said google.cn had been the second largest Chinese language search engine before it officially entered the Chinese market, and it has remained the second place so long that it has become a "distant No.2."

"In 2005, we remained low-key and didn't have many employees in China," said Lee Kaifu, CEO of Google's Greater China operations. "The major thing we did at that time was recruitment. In 2006, we worked diligently in hopes of providing more products and improving the quality of our Chinese language search. This year, we are ready for acceleration."

As for a website, the number of visits determines the market share. "It is easy to judge whether a search engine is good or not," said Lee. "If your website is unstable, you will lose customers even if there are large numbers of visits. Worse still, they will tell their friends not to use the website." Lee believes that improving the quality of the Chinese language search engine is the top priority for google.cn. In order to achieve desirable results, the website is working on a plan to integrate search engine functions.

Integrating search engine functions is also included in Google's global development strategy. The Universal Search promoted by Google is the model for its Chinese operation. In the Universal Search, users are able to find the most sought after pictures or map information. Guided by this methodology, google.cn has introduced map search, book search, key word search and other searches. Most recently, it provided a series of new products like life search, navigation search and stock search.

"In the first half of this year, Google's Chinese webpage keyword search increased 60 percent," Lee stated. These products have brought new life to Google.

Lu Bowang, chief analyst with China IntelliConsulting Corp., said Google was starting to consider the mentality and search habits of Chinese users and is adapting in accordance with their needs. However, Lu doubted whether Google would be able to successfully integrate all its search functions. The task might be too arduous to accomplish. "It is very difficult to integrate everything, and it needs cooperation from a large number of Web engineers," said Lu.

Liu Jun, deputy head of Google's Beijing engineering office, said google.cn had 100 engineers in 2006, and 70 percent of them devoted to improving search quality. This year, Liu said the number of engineers will rise to about 500. While half of them will work to improve search engine quality, the other half will focus on developing the following five areas: map, mobile information service, software, virtual communities and entertainment.

Google has entered a new era with its ICP license. "The Google webpage search has made much progress, and the next task is research and development of Adwords and Adsence advertising system technology," Lee said. Lee revealed that 99 percent of Google's income is derived from Adwords and Adsence.

Sukhinder Singh Cassidy, Vice President of Google's Asia-Pacific and Latin America regions, said the Chinese market still lags behind other markets in terms of Internet advertising, though there is huge room to improve.

"Internet advertising technology and search engine technology are two completely different technologies," said Lee. "We will work harder to improve our advertising technology in the second half of this year."

In terms of Internet advertising, Google has created a local team to tap into the Chinese market. It has been working in cooperation with Chinese Telecom, sina.com and a number of other influential enterprises.

However, Lu pointed out that Google wasn't penetrating deep enough and its marketing network is not as strong as Baidu's.