March 17 (Bloomberg) -- Google Inc., owner of the world's most popular Internet search engine, said the nation has surpassed the U.S. as the world's biggest Web market by users.

China will continue to add Internet users at a faster pace than the U.S., Eric Schmidt, chief executive officer of Mountain View, California-based Google, said at a briefing in Beijing today. The company plans to introduce a new home page for its Chinese site next week, he said.

Local investments and partnerships by Google, which generates almost all of revenue from advertising, have failed to help the company close the twofold market-share lead Baidu.com Inc. has in China. Revenue for the Chinese search market will probably surge about eightfold to 22.1 billion yuan ($3.1 billion) by 2012 from last year, researcher BDA China Ltd. projected.

``Google has been doing much better in China than previously, but they're still a distant second and so there is pressure to do more,'' said Wallace Cheung, an analyst at Credit Suisse Group in Hong Kong, who rate's Baidu's stock ``underperform.''

China added 73 million Web users last year for a total of 210 million, according to the government-backed China Network Information Center, surpassing the populations of Japan and the U.K. combined.

That's an average gain of 6 million users a month, exceeding the 500,000 for the U.S., which ended 2007 with 216 million, based on figures separately released by the center and Nielsen- Netratings. China's Web users may more than double to 490 million by 2010, BDA said.

Advertising Dollars

Google, which gets 99 percent of revenue from advertising, probably generated 501 million yuan ($71 million) from China in 2007, based on Credit Suisse estimates. That figure is equivalent to less than 1 percent of total revenue at Google, which doesn't disclose sales in individual countries.

Baidu's share of the Chinese search market climbed to 60 percent in the fourth quarter from 58 percent a year earlier, according to Beijing-based Analysys International. Google had 26 percent, rising from 17 percent, the researcher said.

Yahoo! Inc., which spurned a $44.6 billion takeover offer from Microsoft Corp., had a share of 9.6 percent in China, declining from 13 percent, according to Analysys's estimates.

Schmidt said he was ``concerned'' Microsoft's planned takeover would affect the openness of the Internet because of the software maker's ``past history.''

``We are concerned about things that Microsoft could do that could be bad for the Internet as a result of such an acquisition,'' Schmidt said.

Microsoft's $3.1 billion purchase of DoubleClick Inc. came under scrutiny by E.U. antitrust regulators on concern it may harm competition. European regulators on March 11 said the transaction could be completed without conditions.

To contact the reporter on this story: Janet Ong in Beijing at jong3@bloomberg.net; John Liu in Shanghai at jliu42@bloomberg.net.

Last Updated: March 17, 2008 00:24 EDT