China's Baidu to acquire local app stores for $1.9 billion

Baidu wants to expand its presence in China's mobile Internet market

China's largest search engine Baidu is planning to acquire two leading app stores in the country for US$1.9 billion, as the company seeks to expand its presence in the mobile Internet space.

Baidu on Monday said it signed an agreement to acquire 91 Wireless Websoft, a subsidiary of Chinese online gaming developer NetDragon Websoft. As part of the agreement, Baidu and NetDragon will negotiate and agree on the terms of the acquisition by Aug. 14.

91 Wireless manages two leading app distribution platforms in China, called 91 Assistant and HiMarket. Both essentially work as third-party stores for apps that can be downloaded to smartphones. More than 10 billion apps have been downloaded through the two platforms.

The acquisition could help Baidu bolster its own position in China's competitive mobile Internet market. For years, Baidu has reigned as the country's largest company for PC-based Internet searches. But recently Baidu has shifted more of its focus to mobile devices, as China has become the world's largest market for smartphones.

Baidu search is already pre-installed on most smartphones on the country. But rivals have introduced their own hit products, including popular social networking and messaging apps, that Baidu has yet to replicate.

The company has released its own mobile software products, including browser, mapping and photo sharing apps, and said it wants to become a key provider of third-party mobile apps.

By acquiring 91 Wireless, Baidu could further diversify its revenue streams by charging fees from developers on the app store platforms, said Mark Natkin, managing director for Beijing-based Marbridge Consulting. Baidu currently relies on online advertisements for most of its revenue, but mobile ads have yet to generate the same level of sales as PC-based ads do.

"In the mobile space, Baidu has so far struggled to really get advertisers to put down a major budget on mobile search advertising," he said. "Maybe they are now looking at other revenue models to diversify their revenues."

The deal could also bring more visibility to 91 Wireless and its app stores. But competition among third-party app stores in China remains fierce, Natkin said.

"There are not just a few app stores in China, but legions of app stores," Natkin said. "And they are all competing for the same user traffic."

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags business issuesmobile applicationsbaidumobileMergers and acquisitions

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Michael Kan

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?