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Baidu’s Mobile Jam
When it comes to a smaller screen, the search giant Baidu seems to be dwarfed by other players. How does it feel to see other tech giant taking the lead with killer products, for example Wechat? For Baidu, It came, it saw, but it hasn’t conquered yet.
At the company’s annual party held lately, Mr. Robin Li made a speech to commit to mobile efforts in 2013. He was confident because the company really had put its heart into this game – has to – and mapped out all kinds of mobile strategies.
Li also laid out the four core businesses of the company: traditional search, mobile cloud, LBS and international businesses. About 25% of its R&D expenditure went towards mobile, with less than 10% of total revenue being yield on mobile end, the company needed to rethink its mobile strategy.
So what is wrong?
Rumors of Baidu buying Sina Weibo, UCWeb and even 91 had been spread since last year as the company was looking to a mobile gateway. Sina Weibo and UCWeb both have huge mobile users. 91 is a great channel of distributing mobile apps. Buying the first could give Baidu instant access to a big user pool, mobile-wise, that’s what the company is dying for. Buying 91 could also put the largest app market in China into Baidu’s hand. A friend told me that Baidu was in talks with 91 about a potential acquisition, the deal fell apart largely due to disagreement over price.
Baidu still need to push harder to either buy or build its own channel in mobile world.
On LBS, Baidu now owns a map service which claims 100 million users by the fourth quarter of last year. The latest version is equipped with more location-based products and integrated a life service platform called Baidu Shenbian(see earlier report). However it is not an easy job to change users’ habits from locating positions on maps to searching life services on maps. More challenges are that too many competitors are diving in this pond. Some veterans have rich experience and user base like dianping, and some newly appeared products like Wechat’s platform or Taobao’s new LBS business, can all be threatens to Baidu.
If Baidu ever wants to acquire dianpin to strengthen its LBS arm, it needs at least US$ 1billion (valuation of $900 million 2012).
Baidu’s personal cloud service was first launched four months ago, and now it has 30million users and 1billion files. So far so good. The company has spent up to RMB 4.7 billion in building its cloud computing center and would open its cloud infrastructure to more hardware manufacturers. What’s noteworthy about this is that Baidu focuses on the personal cloud service rather than the corporate model as Amazon and Alibaba did.
As the shift from PC to mobile is speeding up, Baidu was confronted with serious challenge in diversifying and monetizing its mobile offerings, let alone the up-and-comer search engine launched by Qihoo 360 last year already incurred a dent on Baidu’s market share. If Baidu couldn’t find a solution to fight back Qihoo search and ramp up mobile efforts in the near term, the company’s already tumbled stake would be falling down even further.
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