Baidu.com Inc started internal tests on its first instant message software Baidu Hi today, marking a key step for the leading Chinese search engine to compete with Microsoft and Tencent in the mainland market, Sina.com reported.

Employees of the Nasdaq-listed Baidu have to submit applications through internal networks to get approval to download Baidu Hi, the report said.

But the company didn't reveal how many people will join the test, the report said.

Baidu Hi, Baidu's "strategic" new product, was wholly and independently developed by the company in terms of product design, research and test process, the report said.

Profit from the instant message market on the Chinese mainland reached up to 4.75 billion yuan (US$668 million) last year and the figure is expected to jump by at least 30 percent annually to 8.76 billion yuan in 2009, the report said.

Currently, the instant message market on the mainland is dominated by Microsoft's MSN and Tencent's QQ, the report said.

Baidu's earnings last year rose 108 percent to 629 million yuan, or 18.11 yuan per share. Revenue rose 110 percent to 1.74 billion yuan.

(Shanghai Daily February 29, 2008)