China Mobile, Xinhua form search company; Eye Baidu, Google and 'orderly' new media

China Mobile and Xinhua, a state-run media company, have formed a search engine joint venture aimed at Baidu and Google.

China Mobile and Xinhua, a state-run media company, have formed a search engine joint venture aimed at Baidu and Google.

Xinhua reported:

Xinhua News Agency Thursday signed a framework agreement with China Mobile Communications Corp., the world's biggest mobile operator by subscribers, to set up a new internet search engine company.

The company is called Search Engine New Media International Communications Co. According to Zhou Xisheng, vice president of Xinhua, the venture is part of China's "broader efforts to safeguard its information security and push forward the robust, healthy and orderly development of China's new media industry."

The new state-endorsed search engine is an interesting twist in China's online development. The showdown between China and Google over privacy is well publicized. Given the Google flap---the threat to leave, the clunky diplomacy, the workaround, the content licensing and detente---it was widely assumed that Baidu, the No. 1 search player in China, was the home team. Now that China Mobile and the state-run news agency have formed a search company Baidu's status is in question.

China Mobile has 554 million subscribers and can lend some serious distribution to the new search engine player.