The situation is slightly complicated by Google and China's antipathy towards each other (see the links below for a quick refresher). Google is nonetheless the second biggest website in the country.
Microsoft's presence has until now been tiny over there but this will almost certainly change immediately this new deal takes effect.
It's what might be called taking market share from under Google's nose when it was least expecting it. Baidu, although unheard of in the West, has 75% of the Chinese market and that's the biggest market in the world.
Google has every right to be sick as a proverbial dog about this. It's not that it's losing its market anywhere else, simply that it's been completely bypassed for something so massive.