Internet search engine Google is losing market share to its biggest Chinese rival, Baidu.com, according to research by a leading Chinese Internet research group.

The survey, conducted by the China Internet Network Information Center (CNNIC), has found that Baidu is making rapid progress in Beijing, Guangzhou and Shanghai.

In the Chinese capital Beijing, Baidu has 52 per cent of the search engine market share, while Google has just 33 per cent.

In Shanghai, Baidu has a 44 per cent share and in Guangzhou it is 48 per cent, compared with Google's 38 per cent and 29 per cent respectively.

Around 100 million people use the internet in China which, with a population of around 1.3 billion, has huge potential for expansion.

China's booming online market has attracted much interest from major companies. Yahoo has invested $1bn in China's largest e-commerce firm, Alibaba.com, EBay bought Eachnet for $180m while Interactivecorp now has a stake in the online retailer Elong.

According to CNNIC, China has also overtaken Japan in the number of internet domain name registrations. There are now over 700,000 domain names registered under .CN.