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Last Updated: Wednesday, 20 July 2005, 10:09 GMT 11:09 UK
Microsoft sues Google over search
Chinese internet cafe
China's fast-growing internet market is attracting interest
Microsoft has sued Google for hiring one of its vice presidents to set up a research centre in China.

Google has more than 20% of the Chinese search market and the country is a new battleground for the two firms, which offer online and desktop search tools.

Dr Kai-Fu Lee, who played a key role in the development of Microsoft's search tools, said he was leaving on Monday.

His contract forbids working for direct rivals within a year, Microsoft said. Google said the claim had no merit.

Growth market

A man eyes Google search engine
Images, maps, words and emails can be searched on Google

Google said Dr Lee would "lead the [Chinese] operation and serve as president of the company's growing Chinese operations."

In its lawsuit, Microsoft said it was seeking a court order forcing Dr Lee to abide by terms of confidentiality and non-compete agreements that he signed at Microsoft.

It has also accused Google of "intentionally assisting Lee" in flouting his 2000 contract.

There are forecast to be 135 million internet users in the fast-growing Chinese market by the end of the year.

It is second in size only to the US internet market.

According to web consultancy Shanghai iResearch, Google already has a 21.2% share of web searches in China, making it the country's third most popular web search engine after Baidu.com and Yahoo.

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