Google Who? Chinese Government Launches Sanitized Search Engine, Panguso

By coupling the Xinhua News Agency with China Mobile Ltd., Panguso brings state-safe news to hundreds of millions of Chinese citizens.

Despite its capitalistic flight, China's economic dragon hasn't quite shed its red. On Tuesday, China's main government news agency, Xinhua News Agency, launched Panguso, an Internet search site that will deliver a state-certified version of the Internet, according to the Washington Post.

The government-approved search engine will operate in tandem with state-owned phone carrier, China Mobile Ltd.—coincidentally, the world's largest phone carrier.

The move into state-sanctioned search comes after Google closed its China-based search engine last July. To avoid losing its content provider license, Google agreed to employ a hybrid landing page that directs search through Hong Kong but everything else via Google.cn. The move took its toll: Google's market share fell to 19.6 percent, from nearly 31 percent before the closure of the Chinese search engine, according to Analysys International, a Beijing research firm, the AP reported. In August, Xinhua and China Mobile announced their intention to collaborate on search.

In today's statement from the agency, Xinhua President Li Congjun said, "We would like to fully exploit the advantage of Xinhua as an official agency having a large collection of news and information, and that of China Mobile in terms of technology, advanced operation principles and strong infrastructure."

The move equips the Chinese government with a powerful new tool for controlling what its public finds online. Because Panguso draws upon Xinhua's news reporting and China Mobile's vast subscriber base, some analysts believe it could become commercial viable, though it's unlikely to make a dent in the market share of industry leader Baidu Inc, which claimed 75.5 percent of China's search market in the final quarter of 2010, the Post said.

And the stakes are high. With 457 million Internet users—as of the end of last year—and 303 million mobile web browsers, China is home to the world's largest population of Internet users. China Mobile alone claims more than 589 million accounts—nearly twice the population of the United States.

Yet, from initial reports, the biggest story lies in what's absent from—or excluded by—the search engine. According to Panguso, Nobel Peace Prize Laureate Liu Xiaobo doesn't exist. The same is true for the People's University in Beijing, the first university founded after the 1949 communist revolution. "Dalai Lama" returns only tourism sites or state-sponsored criticism.

By blocking WikiLeaks and blacklisting communications tech such as Skype, Twitter, Facebook, and YouTube, China looks to remain, for some time longer, the biggest smallest Internet market in the world.