UPDATED: 
Google has denied claims that it has acquired 265.com, a leading Chinese online directory, despite a change in internet domain records that showed it as the owner for several days. Negotiations between the two firms have been rumored for some months, and 265.com altered its domain records last week to indicate that Google was now the owner of the domain.
After press reports pointed out the change, Google representatives told reporters that no such deal had been signed, and this evening the domain records were revised to once again show 265 Technology Co as the owner of the domain. While denying a takeover had taken place, a Google spokesperson did not rule out a future closer relationship between the two firms, which are already cooperating on search and advertising, press reports said.
Google battles Baidu
Google is battling local rival Baidu in China's potentially massive search and online advertising markets. While Baidu has offered a directory-style site for several years, Google was slow to provide such a service, despite its popularity in China.
Earlier this year, sources at Google and 265.com denied rumors that the companies were discussing a buyout, according to Sohu.com (link in Chinese). More recent reports said the companies could not agree on a price and instead opted to cooperate on advertising. The 265.com front page prominently features Google's logo and a Google-powered search box.
Some reports today had put the value of the supposed deal at $20 million, without mentioning the source of this information.
Buyout would duplicate existing service
The apparent deal surprised some observers because Google China already operates a directory site very similar to 265.com. Google entered this market earlier this year with 'Google Navigator' a service that aims to make common searches even easier – after the company discovered that many users are confused by its basic search page.
These two screenshots (below) show Google's own Navigator service alongside its apparent new acquisition, 265.com
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Search is 'too hard' for some users
Google's existing directory-style Navigation service – known in Chinese as Google Daohang - is simply a page full of the most common search phrases. Confused users just click on the one they want.
“We discovered Google [search] has two substantially different kinds of user. One is the experienced search user – the basic Google interface is very suitable for them,” explained Google China public relations manager, Cui Jin when Daohang was launched in March.
“But we also have large numbers of another kind of user with extremely limited needs: 'mouse clickers'. They just want to type key words to go quickly to their favorite website, but they are often stuck in Google for a long time without finding what they want.”
Baidu established its own directory service by taking over Hao123.com in 2004.
See also Texyt's earlier report on the launch of Google's own navigation service, Google Daohang, from March 2007.
Updated June 4: This story was substantially rewritten and the headline was changed after Google China denied the apparent takeover deal.
