Google Inc. (NDAQ:GOOG) announced a stake in Chinese social networking company Tianya.cn. The size of the transaction and stake were not disclosed, but the move underscores the difficulties that the three Internet giants (Microsoft, Google, and Yahoo) are facing when entering foreign markets - particularly China. Shareholders are hoping that this move will help give Google a foothold it what could become one of the world's largest markets.

Currently, Baidu has an insurmountable lead on Google and the rest of the US search providers when it comes to pure search. The Chinese internet giant has over 57% of the market while Google stands with just 21% as of last year. As a result, it appears that Google and other US companies are targeting other sectors, like social networking, video games, and more.

Just how big is this market? Well, currently there are around 162 million Internet users in China with only about 12% of the population using it. This number is expected to swell to 70% by 2010 where they are expected to surpass the number of US users. Consequently, investors should be watching closely for opportunities to invest in Chinese internet companies that could become buyout targets as well as those like Baidu that have a strangle-hold on the market.

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