The US web giant Google yesterday formally announced that it will set up a China research and development center this quarter and had appointed Kai-fu Lee, a Microsoft corporate vice-president, as Google China president to head it.

Google said the Chinese market, with the world's second largest number of internet users, is one of the most important areas of its global expansion plans and has a huge pool of talent, especially of IT graduates.

"Google has found the perfect person to lead our growing Chinese operations, so it seems the time is right for us to begin to set up such a center," the company said in a written statement.

It followed news on Tuesday that Microsoft was suing both Google and Lee over his appointment.

Microsoft said Lee's acceptance of the position violated a non-competition promise he had made and that "Google is fully aware of Lee's promises to Microsoft, but has chosen to ignore them, and has encouraged Lee to violate them."

Google responded with a statement saying Microsoft's claims were "meritless" and vowing to defend Lee vigorously.

Lee joined Microsoft in 1998 and started Microsoft Research Asia in China. The center became one of Microsoft's best research organizations and Lee was promoted to vice-president in charge of natural interaction services, the highest-ranking Chinese in the firm.

He has extensive and intensive relations with the government, scientists and engineers, as well as China's information technology arena.

Sun Lilin, senior analyst with Beijing-based market researchers Analysis International, said starting its expansion with the establishment of a research center was a sign of Google's long-term commitment to China and would win trust from the government. The firm's services have been blocked many times in the past due to violations of regulations.

Henry Yang, president of Shanghai-based internet market consulting firm iResearch, also pointed out that Google is no longer purely a search engine, but is penetrating into diverse internet service areas.

According to iResearch, the Chinese firm Baidu has a market share in China of 44.7 percent, while Google follows with 30 percent.

(China Daily July 21, 2005)