“This is not good news for Google,” said Jake Li, who rates Baidu shares “accumulate” at Guotai Junan Securities in Shenzhen. Most Chinese Internet users currently prefer Google’s English-language search results over Baidu, whose service will be improved by the partnership with Microsoft, he said.
The terms of the deal weren’t made public but the deal will likely work similarly to the Bing-Yahoo deal last year where both companies share the revenues from advertisements. Baidu is the dominant search provider in China, one of the few places that Google doesn’t reign supreme. It had previously signed a mobile only deal with Microsoft but rumors of this deal first surfaced a month ago.
The Baidu-Bing service will go live later this year.