Two Chinese search engines, both backed by national media organizations, will merge in the near future, sources said.

Panguso.com, an Internet search engine jointly launched in 2011 by Xinhua News Agency and the nation's biggest telecom operator, China Mobile Ltd, is expected to form a new company with Jike.com, which was set up by the People's Daily newspaper two years ago, said a source with knowledge of the matter, who wished to remain anonymous.

"Chinese authorities have been pushing forward the merger for a while, but hope to keep it low profile," said the source.

The merger process involves many sensitive issues, such as staff changes and other interests, the source pointed out.

Chinese authorities are said to be encouraging more State-owned media organizations to be stakeholders in the new company resulting from the merger, while China Mobile may withdraw from Panguso because it cannot bear the losses related to the business, the source said.

The new company may not only provide users with search engine services, but may also introduce some new media products using the resources of the companies involved, a source from Xinhua said.

On Thursday, Chinese news portal 163.com reported that Panguso and Jike held a meeting and announced the merger in the morning. Zhou Xisheng, vice-president of Xinhua, will take the helm of the new company, the report said.

Deng Yaping, general manager of Jike, and Wang Hongyu, chief executive officer of Panguso, will leave their positions after the new company is established, the report added.

Yang Fan, Panguso's spokeswoman, said that the company held an internal meeting on Thursday morning, but she did not disclose any information about the merger. Officials from Jike also declined to comment on the report.

China Mobile did not respond to China Daily's interview requests on Thursday.

Table tennis legend Deng, who earned four Olympic gold medals and 18 world championship titles in her 20-year sports career, took up the post at Goso.com - Jike's predecessor - in September 2010.

Deng said in a TV program that she had visited almost all of the Chinese Internet gurus - including Alibaba Group Holding Ltd's founder Jack Ma, Sohu Inc's Chairman Charles Zhang and former Google China head Kaifu Lee - to gain insight into running a search engine company.

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