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Microsoft has teamed up with Baidu.com to distribute the search engine's paid-for listings on Microsoft pages, the two companies said yesterday.
The scheme is part of a strategic alliance between the two companies, which will start this month, according to a joint statement.

Microsoft will display Baidu's paid listings - which appear mixed in with search results when key words are typed in - on Microsoft Websites including MSN, Live and other partner Websites in China.

Clicks of the paid listings through Microsoft's Websites will allow it to share with Baidu advertisers' payment based on an undisclosed percentage.

"We expect this partnership to expand greatly our revenue from the paid search listings," said Xu Jiye, a spokesman for Baidu.com Inc.

Baidu reported a 170 percent year-on-year increase with third-quarter revenue of 237.6 million yuan (US$30.1 million). About 80 percent came from paid listings.

The company expects a revenue of 270 million to 280 million yuan in the fourth quarter.

"China is one of our most important markets," said Erik Johnson, general manager of Microsoft Digital Advertising Solution's Greater China division, in the statement.

"The strategic alliance with Baidu will help us provide new opportunities for advertisers, which will further enhance our search business in China."

Only 6.9 percent of Internet users used Microsoft's search engine in October, according to iResearch, a Shanghai-based IT consulting firm. The firm said 88.4 percent of Internet users use Baidu's search engine.

In terms of page views, Baidu has a market share of 63.7 percent, far ahead of Google's 19.2 percent and Yahoo's 7.6 percent in the Chinese market, according to iResearch.

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