Bing will now provide English language search results on Baidu in China.

This deal quite obviously implies that Baidu is desirous of spreading their reach beyond the traditional Chinese speaking market.

As of now, Baidu controls about 80% of the market share in China, followed by Google which holds about 19% share in the Chinese search engine market.

Following a dispute over censorship issues, with the Chinese government last year, Google had put a halt to their operations in China. Users who now enter search terms in the search bar are directed to Google’s Hong Kong search site.

In the worldwide market, Google controls about 91.07% of the search market, while Bing controls only about 3.21%. The tie up with Baidu, will give Bing access to China’s internet user base, which has been estimated to be around 480 million, thus improving their over all market share a little.

It is most likely that Bing will have to follow the censorship guidelines, Google had earlier objected to.

Financial details of the Bing Baidu partnership are not yet available.

Unnamed sources at Baidu have claimed that the two parties have reached an understanding already. However, there has been no official confirmation from either party.

The report was first relayed on Sohu.com.

Stories about the possibility of such an agreement have been doing the rounds since last December when Facebook founder Mark Zuckerberg visited China on a business cum holiday trip. During this trip he not only met CEO of Baidu, Robin Li but also representatives of China Mobile Ltd. and Sina Corp.

It is believed that if such an agreement does reach the stage of execution, it will be in the form of a standalone service from Facebook. This service will not be connected to the international version, as they will be required to follow the censorship rules in China. At present topics such as pornography, gambling and criticism of the ruling Communist party are banned in China.

Facebook, Twitter YouTube etc. which do not follow these censorship guidelines have been blocked in China. Google on the other hand withdrew their operations from mainland China last year, following differences with the government.

Mark Zuckerberg will be required to sort out several issues not only in China but also in the U.S. before he is able to launch Facebook in China.

Launching the site in China, is now likely to be more difficult than ever before, because of the role which the internet in general and social networking sites in particular have played during the recent protests in Egypt, Libya etc.

Microsoft CEO, Steve Ballmer, has made it clear during an interview with CNBC & Bloomberg that Microsoft plans to continue working in China, and they will toe the line as is expected of them.

Following a meeting with President Obama at the White House, he told Bloomberg, “There are cyber attacks on all companies, of any size, from all parts of the world, not just China, at all times, so it’s hard for me to understand how that got tied into the whole notion of doing business in China.” He further said, “China’s the second largest market in the world … [Pulling out of China] is not something we’re thinking about. That’s not part of the way for us to grow.”

Google’s announcement stated that the company had been the direct victim of highly sophisticated and targeted cyber attacks that had originated in China. The attack not only resulted in the loss of corporate infrastructure and intellectual property, but also targeted various human rights activists.

Microsoft, on the other hand, said that they had not been affected by any such attacks and their email system has not been breached. The ethics of bowing to the Chinese government’s cesnorship requirements don’t seem to bother Microsoft.

Microsoft’s market share in China, which is currently estimated at just 0.25%, may grow if Google quits the Chinese search market.

U.S. Government officials have clearly stated that they support Google’s decision to pull out of China. White House spokesperson, Robert Gibbs said, “Our concern is with actions that threaten the universal rights of a free Internet.” While the White House has not yet taken any action against China, Philip Crowley of the State Department said that they will issue a formal message to Beijing and ask for an explanation.

If Google is to be believed, freedom of expression on the Internet is at stake here, as is the future of several companies who wish to do business in China, which is the world’s largest Internet market. Though, that is little more than grand-standing on Google’s part.

Human rights organisations in China have asked other companies to follow Google’s lead and withdraw from China if censorship continues.

So far, however, there is no indication that other companies will withdraw, and China seems adamant on maintaining their policies, since they know that the Western world will not be able to withdraw from their country very easily.

The study shows that the search industry has grown by 41% in July 2009, compared to what it was in July 2008.

Expectedly, Google cornered the lion’s share of the searches conducted. It had 76.7 billion searches which is 67.5% of the total number of searches carried out in July 2009.

Google’s competitors were left far behind. Yahoo! received 8.9 billion searches or 7.8% of the market share. Yahoo! was closely followed by the popular Chinese search engine, Baidu, which received 8 billion searches which is 7% of the market share.

Microsoft’s Bing, which was launched only in June 2009, registered 3.32 billion searches which is a 41% growth compared to July 2008′s volume of searches on Live Search.

Generally speaking, all the well known search engines showed a significant growth in the search volumes they received compared to the same time period last year. Most notably, the Russian search engine Yandex grew by 94%.

comScore has further revealed that the behaviour of search engine users varies markedly from region to region.

They found that Europe accounts for the maximum number of searches with 32.1%, while the Asia-Pacific region follows with 30.8% and North America has 22.1%.

On the other hand, Latin America had the largest number of searches per person. They had an average of 13 search usage days per person in a month, and each searcher conducted 130 searches on an average.

They were followed by Europe which had 117 searches per user and North America which had 12.5 usage days in the month.

The Middle East and Africa lagged behind with only 5.8% of searches conducted worldwide, 10.5 search usage days per person and 97.3 searches per person.

In China the local search engine, Baidu, is not only the most popular search engine, but it has even increased its market share, from 62.3% to 64.5% during the second quarter of 2009 according to Bernstein & Co., while Google may actually have lost some of its market share.

According to reports, Baidu’s revenue for the second quarter of the year has gone up by 37% to $160.7 million, and their net income has gone up by 45% to $56.1 million compared to the second quarter of 2008 when their revenue was $117 million and net income was $39 million, which is far more than observers and analysts had predicted.

To be fair, Google has also made financial gains in the region during the same period, but have not provided any details on the subject, probably in an effort to avoid having to admit that they are not the first in such a big and growing market.

It is obvious that the Chinese population has preferred their local search engine, to the international search giant, but it is also true that while Google and other sites have had trouble with the Chinese authorities for non-compliance of certain rules, Baidu gets the governments support as it complies with their requirements.

Baidu has not only reached the number one position in the Chinese market, but has managed to retain it in spite of the fact that their sales personnel went on strike for a period of two weeks which itself is quite an unbelievable concept in most other parts of the world. In fact in spite of the strike, Baidu expects to gain a further 15 to 18% in revenue in the next quarter.