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China's leading search engine provider, Baidu, launched a Japanese language service in early 2008, challenging the near duopoly that Yahoo! and Google enjoy in the Japanese search market. Yahoo! currently accounts for about 60 percent of the Japanese market, and Google about 40 percent. Japanese-origin search services such as Goo, a subsidiary of telecom operator NTT, lag far behind, and the high profile entry of a Chinese firm into the Japanese market underlines the failure of Japanese industry to develop world class Internet services or content with broad appeal outside Japan. Baidu began a Japanese trial service in March of 2007, with searching limited to websites and images--the latter service becoming popular in China, due to its unfiltered access to Japanese porn, until the Chinese authorities cut off domestic access to the Japanese subsidiary. Within China one of Baidu's most popular services is music search, making illegal downloading easy and convenient; this service may pose legal concerns in Japan. In other respects, Baidu faces challenges in breaking into the Japanese market. Baidu chief executive Robin Li argues that Baidu will benefit from its expertise in Asian languages; however, while Japanese is written with Chinese characters, and has many Chinese words, the languages are unrelated and quite different. Baidu may also face challenges in the more mature Japanese Internet market, where online habits are quite different from Chinese usage patterns. In particular, Internet browsing on mobile phones is widespread in Japan due to excellent data transmission speeds. Baidu dominates the Chinese market, with more than 60 percent of search traffic, compared to 24 percent for Google.
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