Baidu buys app store to boost its mobile armoury
Firm pays US$1.9 billion for app store 91 Wireless in move that reflects the scramble for assets among the mainland's cash-rich internet players
Baidu, owner of the mainland's most popular internet search engine, is buying application store 91 Wireless for US$1.9 billion, the company's biggest acquisition so far and a deal that signals its strategy to secure a stronger foothold in the mobile internet market.
The news came as fellow Chinese internet giant Alibaba announced it had bought a stake for an undisclosed sum in a mainland budget tourism website company, Qyer, and highlights the scramble for assets among the mainland's cash-rich internet players.
"With tonnes of yuan at hand, the best choice is to invest in potential growth for the future," said Hong Bo, a Beijing-based IT industry expert.
"If you don't buy and if your competitor buys, then you will really find yourself in trouble," Hong said, adding that he expected to see a wave of consolidation in the mainland mobile app market currently populated by hundreds of different distributors. Chi Tsang, internet analyst at HSBC in Hong Kong, echoed the view that Baidu was using its US$3.5 billion cash pile wisely.
"Management is becoming more aggressive in using its balance sheet to take advantage of a fragmented sector," Tsang wrote in a note to clients.
Management is becoming more aggressive in using its balance sheet to take advantage of a fragmented sector
The Baidu purchase of 91 Wireless - China's No1 third-party app distribution platform by active users and cumulative downloads, according to iResearch, with more than 10 billion application downloads to date - is the third major announcement in China's mobile internet space in as many months.
