Baidu Takes Stake in NetEase Music-Caixin Global

What happened: NetEase Music, the online music-streaming unit of gaming giant NetEase, announced on Friday, October 12, that it has closed an undisclosed amount of funding led by Baidu. Other investors include General Atlantic and Boyu Capital. NetEase will remain the controlling shareholder of NetEase Music after the deal and Baidu will become the strategic partner of NetEase Music.

Why it’s important: Through the partnership, Baidu will be able to integrate content and services from NetEase Music to its smart device operating system DuerOS, which supports over 100 million smart devices. Although Baidu has its own music unit Baidu Music, the service keeps a relatively small share of the market as compared the top players in the field such as Tencent Music, Ali Music Group and NetEase Music. While China’s money-burning music copyright war is making the growing industry a field for big players, strategic investment becomes a good means to get access to the rich music contents, which is an increasingly crucial component for smart devices, instead of investing heavily for copyrights. Compared with Tencent and Alibaba, who are Baidu’s competitor in a lot of areas, NetEase seems to be a more neutral choice.

Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general. We are looking for stories related to tech and China. Reach her at lixin@technode.com. More by Emma Lee

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