Panguso search, Baidu monopoly investigation leave Chinese Internet at crossroads

pangusoChina’s largest government news provider, the Xinhua News Agency, has partnered with state-owned mobile carrier China Mobile to launch Panguso, a new search engine. Panguso will offer China’s notoriously censored version of the Internet and fall under government regulation.

The collaboration between Xinhua and China Mobile has been in the works since Google withdrew its service from the country due to heavy government censorship and e-mail infiltration from Chinese authorities. While analysts concede the new site will not challenge China’s largest search engine, Baidu, it is expected to be marketable – and more importantly, offer the Communist government yet another tool to control its citizens’ access to the worldwide Web.

According to Xinhua president Li Congjun, Panguso has lofty aspirations for itself. “We would like to fully exploit the advantage of Xinhua as an official agency having a large collection of news and information, and that of China Mobile in terms of technology, advanced operation principles and strong infrastructure.”

Apparently being such a well-regarded news agency doesn’t mean that Xinhua is willing to test Chinese political restrictions, however. Multiple outlets have reported that after testing the site, its results are incredibly limited to pro-China propaganda. A search for the Dalai Lama returned Tibetan tourism information, and a query on imprisoned activist Liu Xiaobo found no results. Our own search into the alleged Chinese Gmail hacks returned stories about Google’s “excuses” and how unfounded its hacking allegations are.

Users will be able to access Panguso via cell phone as well, thanks to Xinhua’s partnership with China Mobile. While the product itself leaves something to be desired, millions of Chinese consumers access the Internet on a mobile device, and the integration of this technology in-house could be a boon for Panguso. Even still, Chinese search titan Baidu accounts for 70 percent of the market, and is currently expanding its headquarters into southern China. According to some of the testing, it seems to have a slightly more thorough database of information to pull from. However, it’s coming under heat not only from its new competitor, but from anti-monopoly regulation. China’s largest encyclopedia site Hudong (also known as China’s Wikipedia) has successfully proposed a government investigation of Baidu.

According to a press release, the State Administration for Industry and Commerce of the People’s Republic of China will be scrutinizing Baidu for various illegalities, such as: Abusing its dominant position to “block and degrade articles…in Hudong.com…and disorder without reason the normal search results.” Hudong also wants $120.3 million from the search engine in compensation for causing its page rankings to plummet.

While Hudong may very well have a case, lobbying such a complaint on the day a notable competitor enters the scene isn’t the best of timing. Baidu inarguably controls the market, and while it appears the search leader is throwing its weight around and could easily be illegally determining its search results, this is the first time in Chinese history an anti-monopoly investigation into peer competition has occurred. Baidu’s cooperation with government censorship undoubtedly gives it stronger legs to stand on as well.

But search engine wars may be the least of the Chinese government’s Internet concerns. According to the Wall Street Journal, Chinese citizens may have also been inspired by the Egyptian revolution, and online statements urging activists to meet at determinate locations on Sundays to protest the authoritarian government are making the rounds. “We invite every participant to stroll, watch or even just pretend to pass by. As long as you are present, the authoritarian government will be shaking with fear,” was originally written on U.S.-based, Chinese-language news site Boxun. This site is banned in China, but the message has been passed along via Twitter and other blogging clients. It’s unlikely China will be thrown into demonstrations of Egypt-like proportions, but the implications are that blogging and social media sites could find themselves in increasingly hot water with authorities. That’s bad news for everyone, but especially for Facebook: The social networking giant allegedly met with Baidu executives in Silicon Valley over the weekend.

If social networking options are hindered or blocked completely due to (even potential) citizen unrest, then the government’s control over the country’s established and emerging Internet search engines is a sobering thought.

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