Google Inc, the most-used search engine, will buy a stake in
Xunlei Networking Technology Co Ltd, a Chinese peer-to-peer file
sharing network operator.
"We will announce the details of the deal tomorrow," said Xunlei
spokesman Jackson Zhang.
Google is reportedly partnering with Ceyuan Ventures, a
Shanghai-based venture capital firm for the investment. Neither
company was available for comment.
Shenzhen-based Xunlei provides a peer-to-peer file sharing
network and download accelerating services. More than 80 million
users have installed its download accelerating software and its
websites attract more than 50 million visitors a day, the company
said.
Analysts said Xunlei's huge user base could help boost Google's
growth in China, where it is struggling to catch up with local
competitor Baidu.com.
"Xunlei could allow Google to bundle its toolbars to Xunlei's
software and websites, and thus help increase Google's users," said
Tiger Hou, research director at the iResearch Consulting Group.
Google, which launched its Chinese website earlier last year,
has been scrabbling for market share, and faces fierce competition
from both Baidu and Yahoo.
Baidu, a local search engine, held nearly 57 percent of the
market by the end of June, according to Analysys International, a
Beijing-based IT research company.
In comparison, Google's share was merely around 16 percent.
Credit Suisse Group estimated that Baidu's market share would
rise to 56 percent next year, almost triple Google's projected 19
percent, according to a September 28 report.
In 2004, Google bought 2.6 percent of Baidu's stake in the
company's last round of financing before its share offering on the
NASDAQ. Google later cashed out after Baidu's listing.
Zou Shenglong and Cheng Hao, two computer graduates from Duke
University, established Xunlei in 2003.
The Shenzhen-based company is said to have raised around $10
million in its previous round of financing from IDG and Morningside
Technologies, two venture capital firms.
(China Daily January 4, 2007)