China’s leading internet search engine unveiled plans yesterday to break into the Japanese market, where it hopes that language similarities will enable it to leapfrog Yahoo! and Google.

Analysts said that it was not clear whether Baidu.com would be able to export to Japan the advantages that it has enjoyed in China, where it as an established and highly localised service provider with a knowledge of the advertising market superior to that of its leading foreign competitors.

Robin Li, the chairman of Baidu, said: “We believe that our proven strength in non-English language search, the high internet penetration in Japan, as well as similarities between the Chinese and Japanese languages make this market an ideal next step for Baidu.”

Baidu commands more than 60 per cent of the internet search market in China and is the fourth-most trafficked website in the world.

Mr Li said: “We are confident that Japan’s search engine- users will appreciate Baidu’s powerful Japanese-language search technology, which will offer a user-friendly alternative to existing search engines.”

Yahoo! dominates the Japanese market. It boasts the country’s most-visited site, which is run by a joint venture with Softbank Corp. Google’s Japanese site ranks second. Nevertheless, Mr Li said that his knowledge of his two main competitors’ operations in China had given him the confidence that he could take them on in Japan.

The Chinese-language Yahoo! site operates as a venture run by the popular Chinese site Alibaba.com Corp and it ranks sixth in popularity. Google has an English-language site that lies in eighth place. Its recently established Chinese site ranks lower.

The strategy marks a policy shift for Mr Li, who told the Financial Times a year ago that Baidu would not follow Google’s model of diversifying into many areas on the internet. He said then: “We are a much more focused company. We do only one thing, which is a Chinese search.”

The lure of Japan’s huge market for advertising and the language similarities with Chinese may have persuaded Mr Li to change his mind. Although China, with 120 million users, has the world’s largest internet population after the United States, its advertising base is tiny. Mr Li estimated that Japan had about $1 billion (£500 million) in annual search-engine revenue — four to five times larger than the market in China.

However, to compete in Japan, Baidu will need to find and train a workforce able to seek out advertising, a move that will require a huge investment in staff, who are much more expensive to hire than in China. In addition, Baidu will need to make huge investments to bring its language search capabilities to a standard that can compete with those of Yahoo! and Google. In China, Baidu enjoys all the advantages of operating on its home turf, including a regulatory environment that favours indigenous companies. Only last month a court in Beijing cleared Baidu.com of helping users to download music illegally in a case brought by some of the world’s largest music companies. The International Federation of the Phonographic Industry, which estimates that about 85 per cent of all music consumed in China is pirated, said that it would appeal against the ruling and was confident that it would be overturned. The trade group has also blasted Yahoo! China’s search engine for providing links to websites that offer unlicensed music downloads.

A new day

Robin Li last year

‘We do only one thing, which is a Chinese search’

. . . and now

‘We believe that our proven strength in non-English language search, the high internet penetration in Japan, as well as similarities between the Chinese and Japanese languages make this market an ideal next step for Baidu’

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