Three Mobile Internet Portals of Baidu Are About To Merge

On July 16, Baidu announced the signing of a memorandum of understanding with NetDragon Websoft Inc.. It will invest $ 1.9 billion to acquire the entire issued share capital of 91 Wireless held by NetDragon. Before August 14, 2013, Baidu will firstly sign to acquire 57.41% of the shares of 91 Wireless held by NetDragon, and it also declared the intention to acquire the remaining shares. Before the last deadline, if other shareholders are willing to sell their holdings of shares, Baidu will sign approximate terms for the acquisition as with NetDragon.

For Baidu, it is time to make the key acquisition to strengthen the layout of mobile Internet. Baidu has two entrances in the mobile Internet: Baidu Search App & Baidu Maps App have already owned hundreds of millions of installed capacity. As the user habits have changed, mobile Internet Apps replaced mobile browsers to become the biggest entrance. Baidu changed its name for Baidu Mobile App to Mobile Assistant last year, while it began to support the “Application Search”, as well as the “LightApp plan” in the first quarter of this year, which both have shown Baidu’s ambitions for mobile applications market.

Both are entrances, but Baidu abandoned UC, and selected 91

Robin Li has repeatedly stressed his fancy of “distribution capabilities” of Baidu in the mobile Internet, and application distribution is one important direction. Baidu has made great progress in the application distribution. Baidu’s mobile application distribution volume has rose over 50% for three consecutive quarters, and conversion rate of user’s downloading improved for 28% in the first quarter of 2013 against the previous quarter. Probably having tasted the sweetness of application distribution, Li will shoot again to invest $ 1.9 billion to acquire 91 Wireless.

Baidu was once rumored to acquire the UC browser for only $ 1 billion or so. It finally did not choose the mobile browser as an entrance of increasing decline, but chose the application entrance instead that is becoming increasingly important. The decision was backed by Robin Li’s judgments based on the Baidu’s data available: Baidu’s Report: Mobile Internet Trends in Q1 2013 shows that online shopping, video, search, maps and other applications had double-digit growth for use length, but the browser has only increased by 2%. Browser starts per day and calls by external App are gradually declining in the proportion.

In addition to expanding applications market share, Baidu also fancies 91’s resources for platform developers. 91 Wireless has more than 100,000 developers, and Baidu Cloud, which is being promoted by Baidu greatly, is in a high-profile to provide developer-oriented Cloud Application Engine (BAE), cloud storage, cloud LBS, cloud sending and other services.

Again revealed Baidu’s acquisition preference: wholly-owned

Baidu shows a clear intention on the 42.59% of the shares in the hands of other 91 shareholders, which once again confirms that Baidu tends to wholly acquire in investment ideas. Alibaba and other giants take capital injection more, but Baidu is more fond of absolute control. The previous case was incorporating PPS into iQIYI (爱奇艺).

Following the acquisition of PPS, Li is going to complete the second biggest deal this year. Thus, Baidu forms three mobile Internet portals of mobile search + Baidu Map LBS + App distribution, showing clearlyBaidu’s mobile Internet strategy: shifting the portal status of PC Internet to the mobile Internet.