Google loses China market share
The company has increased its slice of the market in the three towns by at least 10% in the past six months.
Internet use is growing and China has the potential to become a world leader.
State-run newspaper China Daily - citing research by Analysys International - estimated that China's search engine market is expected to be worth about 3bn yuan (£207m; $370m) by 2007, up from last year's value of 700m yuan.
Internet search users are predicted to increase from about 100 million currently to 187 million in two years' time.
Investors had a chance to buy into the predicted boom when Baidu listed on the tech-heavy Nasdaq stock index in New York earlier this month.
Google is among those who have bought into Baidu and now owns a strategic stake of just under 3%.
Baidu was valued at $850m (£478m) ahead of its flotation and its shares, which sold for $27 each, quickly surged to $120.
However, since the share sale questions have been raised over the speed of its future growth - despite it reporting net profit of 12.1m yuan on sales of 69.7m yuan - and the stock has dipped back to trade closer to $83.
It currently has a market capitalisation of $2.7bn and Tuesday's survey has helped reassure investors.
Baidu shares jumped 6% to $83.35 in New York on Tuesday
Carving it up
According to CNNIC, Baidu now has 52% of the search engine market share in Beijing, compared with Google's 33%.
In Shanghai it has a 44% slice and in Guangzhou it is 48%, compared with Google's 38% and 29% respectively.
Three months ago, Google had the biggest market share, CNNIC said.
The rest of the market was split between Yahoo!, Sina and Sohu.com.