The planned service is set to be fully launched in the third quarter of this year, with a corresponding “major marketing campaign”.
Michael Tong, Netease COO, said: “Our search engine is still in a kind of open beta mode right now. It is true that you can go into the domain name and try it out, but a lot of the new functionality and the uniqueness of the search engine hasn’t been released yet.”
The move will prove a blow to Google, which has operated Netease’s search engine since 2000. The launch of Netease’s own proprietary search engine will see the termination of this contract.
Esther Yang, managing director of MindShare Interaction, said she could understand why Netease is looking to develop a search engine. “With more and more small and medium-sized vertical websites springing up in China, consumers are increasingly using search engines to find them,” she said.
With advertising only making up 12 per cent of Netease’s income last year, the majority coming from its core online gaming business, search-based advertising could open up a new revenue stream.
Yang warned that success will depend on how its search technology compares with Baidu’s.
Baidu’s revenue from advertising grew 169.5 per cent last year to US$102.6 million. The company continues to dominate China’s search market, with over 15 million more users than Google.
