April 18 (Bloomberg) -- Baidu.com Inc., operator of China's most-used Internet search engine, said its Japanese Web site, which has links to pornography and critics of the Chinese government, has been blocked in its home market.

The Japan site hasn't been accessible within China for two days, Wei Fang, a Baidu spokesman, said today, declining to provide a reason. The site, which carries advertising from small and medium-sized Chinese companies, can be accessed from outside China. Wang Lijian, a spokesman for the Ministry of Information Industry, the nation's Internet regulator, declined to comment.

The blockage highlights the challenge of operating in a regulated market where the government bans criticism against the state and denies access to Web sites including those of Amnesty International. Google Inc., Yahoo! Inc. and Microsoft Corp. have restricted some of their online material in China, the world's second-biggest Internet market by users.

``The blocking of the site may hinder Baidu's ability to build up traffic to the Japan site,'' said Richard Ji, a Morgan Stanley Asia Ltd. analyst in Hong Kong. The site targets Chinese companies that want to advertise in Japan, he said.

From China, searches through the home page of Baidu Japan return network error messages. That's characteristic of blocking by the Chinese government, according to Andrew Lih, a former Columbia University professor who lives in Beijing and is writing a book about Internet-based communities.

Baidu is the first Chinese company to have a Web site blocked in the country, Lih said.

Government Ban

China was home to 137 million Internet users at the end of 2006, according to government data. It trailed only the U.S., which had 211 million Web users last year, according to researcher Nielsen/NetRatings.

China, which owns all of the country's newspapers and broadcasting stations, bans anti-government material and limits access to some overseas Web sites.

Baidu opened a trial version of its Japan site last month as part of efforts to attract Web users from the world's second- biggest economy. The site has Web links related to Falun Gong, the spiritual group outlawed by the Chinese government in 1999, and pictures of the 1989 student protests in Tiananmen Square in Beijing. Such information can't be found on Baidu's China site.

Google, owner of the world's most-used search engine, caved in to government pressure by opening a China Web site last year that excludes links to anti-government, pornographic, and gambling content censored by the Chinese government.

The Mountain View, California-based company had a 17 percent share of the Chinese search market in the fourth quarter last year, second to Baidu's 58 percent, according to Beijing-based researcher Analysys International.

Google, Yahoo Competitor

Baidu Japan only allows users to search for Web sites and online pictures. The company said it plans to spend about $15 million this year on the Japan site, which competes against Yahoo! Japan Corp. and Google.

American depositary shares of Baidu rose 0.6 percent yesterday to $99.28 in Nasdaq Stock Market composite trading. The stock has fallen 12 percent this year, compared with a 2.7 percent gain for Google.

Baidu needs ``a service in Japan with content people won't suspect is censored by the Chinese government, but it's that same content that gets them in trouble in China,'' said Florian Pihs, an analyst with Analysys.

To contact the reporter on this story: John Liu in Shanghai at jliu42@bloomberg.net

Last Updated: April 18, 2007 01:36 EDT