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Google Inc and Baidu.com Inc, its biggest rival in China, are exploring similar options to expand their online video services in the world's fourth-largest economy.

 

Industry sources told reporters last week that the two Internet search leaders have independently had early discussions with some local video websites for potential business cooperation or possible acquisitions.

 

However, neither Internet giant has secured a specific target yet, said sources with knowledge of the situation.

 

The moves come after Google last month closed its US$1.65 billion acquisition of top online video-sharing site YouTube. Baidu also launched its own Chinese-language video Web channel on a trial basis a few months ago.

 

"Google and Baidu have the same idea of expanding their online video business in China, though they are still studying a variety of business proposals," said an Internet industry source close to the two websites in China.

 

"I think it's a very natural move. Especially for Google, it definitely wants a local version of YouTube as it has already established a Chinese version of the Google website," the source said.

 

The source, who declined to be identified, said Google is considering whether to simply translate its global YouTube site into Chinese or build up a brand-new "YouTube China," possibly through the acquisition of a local video-sharing website, which may cost more time and money.

 

"As a leader in China's rapidly growing Internet sector, we constantly evaluate opportunities to build value for our users and our shareholders," Baidu said in a statement Thursday.

 

"We will announce material business developments, if any, when appropriate."

 

Baidu declined any further comment while a spokesman for Google in China was not immediately available for comment.

 

In the United States, YouTube has enjoyed explosive growth over the past year and in the process, pioneered a new grassroots online video star-making system, as Web viewers seek out short-form comic sketches created by other users.

 

In China, Viacom Inc's MTV Networks in October agreed to share music videos and shows with Baidu in an attempt to reap advertising revenue in the world's second-largest Internet market, with more than 120 million users.

 

Baidu has approached a number of Chinese video-sharing sites including 56.com and Tudou.com for informal talks, local media reported last week, however, a senior executive at Tudou.com downplayed the possibility of any potential take-over.

 

"We don't have any plans to sell our company at present as we want it to grow stronger and faster on its own at this stage," said Vicky Wang, a vice president at Tudou.com, adding that the company hopes to list in the future.

 

Wang's desire not to sell out may be common among owners of video-sharing sites, said another industry source, and would be one of the biggest challenges that Baidu and Google would face if they found acquisition targets were limited and expensive in China.

 

(Xinhua News Agency December 19, 2006)