The market share of American search engine Google, which got its licence renewed in China after giving an undertaking to abide by intrusive local laws, has dropped to 24 per cent in the second quarter from 31 per cent in the first.

The marked decline in market share took place during its confrontation with the Chinese government in the second quarter over the intrusive sensor laws following which the company moved its local headquarters to Hong Kong.

During this period, the market share of its main Chinese rival Bidu went up to 70 per cent, reports in official media here said.

The market share is determined by advertising revenue.

The American search engine managed to obtain its licence to operate in China after giving a written undertaking to abide by Chinese laws, some of which it opposed in the past.

Its U turn was apparently prompted by the giant Chinese internet market that grew to be the worlds biggest with over 420 million subscribers.

After reviving operations in China, Google has cut commercial ties with two of its Chinese advertising agents to beef up its market strategy.

The US-based search engine has ended partnerships with Universal Internet Media and Xi'an Weihua Network, major advertising agents for Google in East and Northwest China, Marsha Wang, spokesperson for Google China, told state-run China Daily.

Universal Internet Media is based in Suzhou, Jiangsu province and Xi'an Weihua Network is based in Xi'an, capital of Shaanxi province.

The two are among 25 of Google's authorised adverting agents in the country.

"The partnerships ended a couple of weeks ago because both sides felt there were no longer any mutual benefits," Wang said.

She declined to comment on how the breakup would affect Google's agents.

Cheng Yu, general manager of Zoom Interactive, a Google authorised advertising agent in Beijing warned that Google's market share in China may further decline if the company does not take measures to soothe advertisers' concerns.

Google will still commit to China's online advertising market and will not give up its Chinese website, Wang said on Monday.