Jike.com, the search engine arm of the People's Daily, told the Global Times Sunday that it plans to recruit 40 graduates in March, refuting allegations of layoffs due to bad performance under the management of former Olympic table tennis champion Deng Yaping.

An rumor from an anonymous source, which spread like wildfire on social media and was quoted by many domestic news outlets Sunday, claimed that Jike's chairman Ma Li, also the deputy editor-in-chief of the People's Daily, blamed Deng for Jike's bad performance and planned to dismiss some 100 employees, representing 25 percent of the 400 employees Jike's website says it has.

But according to a Jike statement e-mailed to the Global Times Sunday, the allegation is false and the company has no intention of restructuring staff in the near future, instead offering dozens of vacancies in 2013.

Despite large investments in talent over the two years since its establishment in 2011, Jike's performance has still been unquestionably bad, mainly due to improper management and unattractive product positioning, Ji Chendong, an industry analyst with Frost & Sullivan, told the Global Times Sunday.

Data from Jike's website indicated that 82 percent of its employees were technical engineers.

That lack of marketing talent has prevented jike.com from becoming well known or positioning its product well enough to woo users away from domestic rivals, said Ji, noting that the number of users determines advertising income, which accounts for more than 90 percent of revenue in China's search engine industry.

A staff member from the Jike public relations department, speaking anonymously, told the Global Times that the company's current top priority is building up its technology, not gaining profits.

With the support of the government, it aims to release the latest food and drug safety information to the public, which will set them apart from rivals, she noted, adding that this goal is still some way off.

Although Jike has made some innovations, it does not seem competitive enough to fight for a position among strong rivals, You Tianyu, an industry analyst from iResearch, told the Global Times, noting that market shares and business models in the domestic online search industry are well established and hard to change.

Data from US research consultancy Hitwise indicated that Baidu Inc seized a 65.7 percent market share by traffic in December 2012, ranking first, while Qihoo 360 Technology Co's growing search engine came second with 8.7 percent. Jike and another State-owned search engine, Xinhua News Agency's panguso.com, did not make the list.

As newcomers lacking experience in the industry, Xinhua and the People's Daily will keep losing money for a long time, but could still have a promising future with the support of the government, said Ji.