China Mobile and the Chinese state-run Xinhua News Agency have teamed up to launch an internet search engine.
Panguso will search for news, websites, images, videos and audio data, the new firm said. It also has a mobile service in the works. China Mobile is the world's biggest mobile operator.
"The operation of Panguso is an important move by Xinhua and China Mobile to extend our cooperation in cyberspace," president of Xinhua News Agency,Li Congjun, said at the opening ceremony.
"We would like to fully exploit the advantage of Xinhua as an official agency having a large amount of news and information, and that of China Mobile in terms of technology, advanced operation principles and strong infrastructure," he said.
China boasts some 457 million Internet users and local search outfit Baidu dominates the market. Google, while present in China has had a series of well-publicised run-ins with the Chinese authorities.
"Although the online search market is highly competitive and several domestic and foreign players have taken their share, the market still has huge potential," said Wang Jianzhou, chairman of China Mobile.
"China Mobile would like to create a brand new search engine that meets the demand of the market and consumers and links the Internet with cell phones," he said.