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Last Updated: Friday, 23 June 2006, 06:45 GMT 07:45 UK
Google offloads Baidu investment
Offices of
Baidu and Google are now fierce rivals in China
Google has sold its stake in rival Chinese internet search firm

The US company confirmed that it had disposed of its 2.6% holding in Baidu - acquired before the latter's 2005 stock market flotation - on Wednesday.

Baidu is the leading web search firm in China, a market in which Google lags behind the domestic provider.

Analysts always saw Google's purchase of Baidu shares as a strategic move and Google said it now wanted to focus on its own Chinese business.

China focus

China is the world's second largest internet market, with more than 100 million users.

Google and other foreign firms see huge potential for growth in China but their willingness to censor access to politically sensitive material, to comply with government demands, has attracted fierce criticism.

It has always been our goal to grow our own successful business in China
Debbie Frost, Google

According to US regulatory documents, Google made a substantial profit on its investment in Baidu.

It sold its holding for more than $60m, having acquired the shares for just $5m last year.

Baidu's shares were valued at $27 each when the firm floated last year and are currently trading at about $80 each.

"It has always been our goal to grow our own successful business in China and we are very focused on that," Google spokeswoman Debbie Frost said, confirming the share sale.

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