Baidu, the number-one search engine in China, now may have an even bigger competitive lead thanks to the China Internet Illegal Information Reporting Center. CIIIRC, a Chinese watchdog group, last week accused Google of allowing pornography and other vulgar content to be viewed in China.

Google executives met with Chinese officials over the weekend to discuss their concerns. "We will continue to meet with the government to address their concerns, and we wish to communicate directly with them in regard to our services and progress in addressing this problem, Google China spokesperson Cui Jin told the Global Times.

Seizing Opportunity

While Google attempts to settle the allegations from Chinese officials, Baidu.com, often referred to as the Google of China because of its resemblance to Google's design and layout, continues to gain strength.

Baidu has grown over the past few years with 62.2 percent market share in 2008, up from 59.3 percent in 2007, according to Analysys International, a research company in Beijing. Google's share in China for 2008 was much lower, 27.8 percent.

The Chinese search giant, which was ranked the third-largest search company worldwide in 2008, is considering how to increase its lead over Google. The company is luring advertisers to its Web sites and considering several acquisitions, according to the Bloomberg news service.

"Internet is at an early stage of its development; it's dynamic and we need to stay ahead," Baidu CFO Jennifer Li told Bloomberg on Friday.

Music To Users' Ears

Currently, users of Baidu.com can both link to and download unlicensed music. That service is often considered one of the main factors behind its success in China over Google, which doesn't offer a similar service.

For Baidu, staying ahead might mean finding legal ways to offer the music service to users rather than fighting off allegations of music piracy. Warner Music Group, Sony BMG Music Entertainment, Universal Music Group, and EMI Group filed copyright-infringement lawsuits against Baidu for posting links to Web sites that offered the illegal music downloads. A Beijing appeals court, however, ruled in Baidu's favor, finding the company not guilty.

While Google settles its issues with China to filter pornographic and vulgar content, it is also working on a way to better compete with Baidu. It may not have the most market share in China, but it's growing at a faster rate than Baidu with its 27.8 percent market share in 2008 up from 23.4 percent, according to Analysis.

Google is partnering with the Chinese Web site Top100.cn, which it co-owns, to launch a free music-download service in China.