Google has formed a strategic alliance with Sina, one of China’s largest portals, that will see the Mountain View site power its partner’s search features in return for integrating its AdSense technology on to Sina’s pages. Financial terms of the tie-up were not disclosed, but it will involve directing Sina search traffic to Google and a search ad revenue share; this may help both companies counter Baidu, which overtook Sina’s previous lead in the online ad space during Q1 2007. Reuters said the partnership will also “allow Google users easier access to Sina’s news content,” in what sounds like an expansion of Sina’s news content on to Google News and Google search results.
George Chu, China internet analyst, UBS: “The deal with Sina is [Google's] largest [in China] so far and will increase Google’s market share in search traffics and search revenues. Both Google and Baidu are competing to sign up smaller websites for their traffic. Advertisers may be less willing to pay a higher keyword price at Baidu now that Google is a more creditable competitor.”
Sina has a strong Silicon Valley track record. Formed in 1999 out of the merger of software maker SRS and Sinanet of Sunnyvale, California, the company’s top brass were largely educated at US universities. Google’s Chinese endeavor has so far included a $5 million investment in P2P video site Xunlei and starting an online book repository. its 21.7 percent search market share in China is behind Baidu’s commanding 55 percent, according to April iResearch data.