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China Mobile, Xinhua launch search venture

The wireless carrier teams up with the government-run Xinhua News Agency to create a new search engine, which isn't likely to make Google's life any easier in China.

Google may soon have even more competition for the attention of Chinese citizens doing Web searches.

China's state-run Xinhua News Agency announced Thursday that it has signed an agreement with local carrier China Mobile to set up a new search engine company.

Though few details were provided, Xinhua said that work on the new search venture has reached a "substantive operation" stage, according to the Associated Press. Xinhua also didn't specify whether the search site would be directed toward the Internet in general or toward the mobile market, which could tie in with China Mobile's involvement.

Though it will likely take time to ramp up, the new Xinhua search engine could pose some competition to Google, which has lost users in China since shipping its search site off the mainland and onto Hong Kong earlier this year. The move was orchestrated by Google as a way to skirt China's censorship laws, which have been a thorn in the side of the search giant since it set up shop in the country in 2006.

Beyond any threat the new search engine may pose, Google has also been shedding users to local competitor Baidu, which enjoys a much larger and growing share of the market. In the first quarter, Google's search engine share in China dropped to 24.2 percent from 30.9 percent, while Baidu's climbed to 70 percent from 64 percent, according to Chinese research firm Analysys International cited by the AP.

In the mobile search arena, Google also trails with a 12.3 percent share, compared with Baidu's 34.3 percent and another competitor with 16.9 percent, according to the AP.