A view of the headquarters of Bytedance in Beijing in December 2018 Photo: IC

Domestic internet technology giant ByteDance has become the largest shareholder of Chinese online encyclopedia company Baike.com after buying a 22.2 percent stake in the latter, according to information released by online company enquiry website qichacha.com on Monday.

The acquisition, which according to the website was valued at 8.7 billion yuan ($1.23 million), will intensify the competition in the search engine field and could potentially challenge the top dog Baidu, Li Chao, an analyst at Beijing-based consultancy iResearch, told the Global Times on Monday. 

"Baidu has a strong competitive edge thanks to its dominant market share and huge user population," Li said. "Most people in China still use Baidu as a search engine out of habit."

According to a report by statcounter, a web traffic analysis website, as of July, Baidu was still the biggest search engine in China with a market share of up to 76.4 percent, followed by Sogou, Shenma and Google. 

In contrast, ByteDance has only begun to move into the field, with the launch of its own search engine called Toutiao Search in late July. However, the company's relatively late entry in the sector does not mean ByteDance has no chance to challenge Baidu, according to Li.

"Although it is still a new search engine service, it is possible that ByteDance can build up an ecosystem based on its content on Toutiao, as well as its newly acquired stake in baike.com," Li noted. 

"If it can provide valuable searchable content, it can mobilize a considerable number of active users from its other services such as Toutiao and TikTok."

Beijing-based baike.com, which was founded in 2005, has competed with another encyclopedia offered under Baidu for years, and it has been regarded as the only major competitor of Baidu's encyclopedia service, according to Li.

Baidu, on the other hand, has been the target of criticism for the way it operates its search engine service. Critics have complained of false medical advertising and false news sources that have been sponsored. 

"The key competition now is the content pool and ecosystem for the search engines," Li said. 

"This is also why ByteDance is acquiring an external source such as baike.com instead of building one from scratch. This is the cheapest and quickest way to establish a pool of searchable content for an emerging search service."