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)