YAHOO, the US search engine giant, has set up a search engine portal called Yisou.com in the city, marking the beginning of its new development strategy in China.

The new website is the first the US company has registered for search engine services in a country outside the US.

It provides 5 billion web pages, 90 million photos and 1 million pieces of free music for surfers.

Insiders said Yisou will make the search engine market in China more competitive. Google, a fierce competitor of Yahoo, has recently invested US$10 million in Baidu.com, a major Chinese search engine, in a bid to compete with Yahoo.

"Yisou will help us further expand China's search engine market," said David Lu, deputy managing director of Yahoo's North Asia operations.

Early this year, Yahoo purchased Hong Kong-based 3721 Network Software Co Ltd at a cost of US$120 million as part of its development strategy for China.

Yahoo now has 25 websites in the world with 237 million users. In the past two years, it has purchased five world-brand search engine companies at a cost of US$2.6 billion.

It will relocate about 1,000 search engine servers from the US to China next month.

"If we say the competition in China was mainly between Google and Baidu before, in the future it will be between the two alliances - Yahoo-3721 versus Google-Baidu," said Zhou Hongyi, president of Yahoo China.