Reuters published an article today in which Microsoft asserts that China is its top search priority:

“Microsoft is committed to the China market and the search market in China is the most important strategic market for Microsoft,” the company said on Tuesday in emailed responses to questions from Reuters.

China has the largest internet and mobile markets in the world; the scale is massive and the obvious basis for the quote above. There are 350 million Chinese Internet users and 700 million mobile phone subscribers according to various estimates. However, the Reuters piece pegs the value of paid search in China at only 2 billion yuan ($293 million) currently. (See Chris Sherman’s 2008 discussion of the Chinese search market for more detail.)

As is widely known, Baidu is the search-market leader in China with somewhere between 63 percent (comScore) and 75 percent (iResearch) share of query volume.  Google is number two with up to 31 percent (Analysys International). In Q2 Bing had 0.3 percent of the Chinese search market (iResearch).

The Reuters article suggests that there has been some growth in Bing’s Chinese usage since its launch in June:

Since Microsoft launched Bing’s China beta version in June, the number of users who have visited the site at least three times a month has increased 30 percent as of October.

The Chinese Internet is heavily censored by the government, which has been an ongoing source of controversy for American companies and search engines doing business there. Google and Yahoo have been roundly and repeatedly criticized for their participation in that censorship.

NY Times columnist Nicholas Kristoff wrote a column in November in which he called for a boycott of Bing because of its heavy apparent censorship of politically sensitive topics in China:

If you search a term on Bing that is politically sensitive in China, in English the results are legitimate. Search “Tiananmen” and you’ll find out about the army firing on pro-democracy protesters in 1989. Search Dalai Lama, Falun Gong and you also get credible results. Conduct the search in complex Chinese characters (the kind used in Taiwan and Hong Kong) and on the whole you still get authentic results.

But conduct the search with the simplified characters used in mainland China, then you get sanitized pro-Communist results. This is especially true of image searches. Magic! No Tiananmen Square massacre. The Dalai Lama becomes an oppressor. Falun Gong believers are villains, not victims.

What’s most offensive is that this is true wherever in the world the search is conducted – including in my office in New York. If Microsoft felt it had to bow to Chinese censorship within China’s borders, based on the IP address, that might be defensible. But when Microsoft skews its worldwide searches to make Hu Jintao feel better, that’s a disgrace. It becomes simply a unit of the Central Committee Propaganda Department.

Microsoft responded to the column in a blog post, but largely sidestepped the thrust of the criticism asserting instead that these results were the by-product of bugs rather than censorship. Google, for its part, has also tried to sidestep similar criticism and justify its compliance with Chinese government rules, even suggesting that it’s helping to improve the censorship climate in China.

The search battle in China will soon move off the desktop and onto mobile devices.

The iPhone, after a slow start, has sold reasonably well there. The iPhone is predominately a Google search device. In addition, Google will be using Android handsets — and voice search in Mandarin — as a way to gain share in the market. Baidu is also making an effort to get its mobile search application pre-installed on handsets to prevent Google from making large gains in search via mobile. Currently Nokia handsets are dominant in China but that will change as more smartphones are adopted, which should favor Google.

Given how entrenched Baidu appears to be on the PC and how Google is well positioned in mobile, it will be challenging for Microsoft to make significant gains. But even a small share gain means lots of potential volume given the size of the Chinese market.

Related Topics: Microsoft: Bing | Microsoft: Outside US

About The Author: Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling. See more articles by Greg Sterling