Google buys stake in China's Xunlei Networking

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BEIJING -- Google has purchased a small stake in fast-growing Chinese Internet download software company Xunlei Networking Technologies Ltd., the companies said Friday.

Google's latest deal in China, where it trails local search engine Baidu.com in attracting the country's growing number of Internet users, sees it buy into a company that claims 120 million people a day employ its peer-to-peer filesharing software to perform video and game downloads.

No financial details of the partnership were available from Google and Xunlei, which is based in Shenzhen, just north of Hong Kong.

Google's investment in Xunlei follows a partnership Google announced late Thursday to provide its search capabilities to subscribers of China Mobile, the largest mobile telecommunications provider in a market of more than 400 million cell phone users.

"On the one hand you have downloads and on the other you have search, so you can imagine the possibilities," Li Kaifu, Google China's president, said Friday in Beijing, Reuters reported.

The deal comes on the heels of Google's $1.65 billion acquisition last October of top U.S. online video-sharing Web site YouTube.

Joining Google in the Xunlei investment were venture capital firms Ceyuan Ventures, Morningside Ventures, IDGVC Partners and Fidelity Asia Ventures, press reports said.

Zou Shenglong and Cheng Hao founded Xunlei, which means "thunder" in Chinese, in Silicon Valley in 2002.

Google has a 16% share in China's search-engine market and is battling homegrown search engine Baidu.com, which controls nearly 57% of the Chinese market, according to Beijing-based IT research firm Analysis International.
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