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Last Updated: Friday, 5 August 2005, 05:36 GMT 06:36 UK
Chinese web firm to join Nasdaq
Chinese internet cafe
Millions of Chinese use internet cafes every year
Baidu.com, a Chinese web search engine, has been valued at more than $850m (478m) ahead of its flotation on the Nasdaq stock market in the US.

Shares in Baidu, the leading supplier of its kind in China, is due to begin trading on the tech exchange on Friday.

The five year old company, in which US rival Google owns a share, is banking on strong growth in its domestic market for its future expansion.

Chinese internet search users are forecast to nearly double by 2007.

Web literacy

Baidu shares were priced at $27 each on Thursday, giving the firm an initial market capitalisation of $856m.

The company will raise $108m through the flotation, which will be used to develop new technology and explore new product areas.

China's web search market was worth about $150m last year, according to research by new media consultant Shanghai iResearch.

The market is expected to expand rapidly over the next few years as more people become comfortable shopping online and more sophisticated online payments systems come into operation.

Internet search users are predicted to increase from about 100 million currently to 187 million in two years time.

However, Baidu faces increasingly tough competition, not only from Chinese rivals such as Sohu.com and Sina, but from foreign firms.

Both Google and Yahoo! are looking to expand their operations in China.

Google secured a licence to operate in China earlier this year and is considering opening an office there.

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