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Baidu Search Engine Launches IM in Beta - Baidu Hi

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Search engine Baidu has launched instant messaging (IM) in beta, the first formal foray into the Chinese IM market. The "Baidu Hi" service won't be expected to generate revenue in the short term. But the Chinese search titan must find a way to diversify its revenue base.

The Chinese language search engine recently launched a Japanese portal.

Baidu, China's most popular search engine, has more than 60 percent of the search engine industry revenues, according to Analysys International, a Beijing-based research firm.

Google China holds second place with about 26 percent share.

Yahoo China site remains in third with a little less than 10 percent share.

Baidu considers the service a strategic product, according to the Chinese search engine's press release issued tonight.

As with Google, search drives revenue for the fast-growing Baidu. For the past three years Baidu has doubled in size every year. The growth rate may drop to 30 percent in the next five years as Baidu's revenue base grows.

The beta is restricted to Baidu employees only. No word on how long the beta will last or when the product will officially launch.

One company, Tencent, based in Shenzhen has about 80 percent of the IM market share in China with its QQ service. How large is Tencent's customer base? QQ has 580 million users. The company earned 1 billion yuan in the Q3 last year through Internet services.

In second place, Microsoft's MSN Instant Messaging runs far behind Tencent's QQ platform.

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