Many Chinese tech giants continued to diversify beyond their flagship products in 2013, and Baidu (NASDAQ:BIDU), best known for its search engine, was no exception to this trend. While the company acted more conservatively than some of its peers in China, by the end of the year, it became crystal clear that Baidu was no longer just a “search company,” though it’s not yet obvious what type of company it has transitioned to.
Peeking over the fence
Like other Chinese tech giants, Baidu made several entrances in markets beyond mainland China. However, it’s difficult to assess how aggressive or successful its international expansion has been thus far.
Early in 2013, Baidu told Tech In Asia that Southeast Asia, the Middle East and North Africa were the company’s three target regions for growth, and the year mostly saw it continue to take conservative steps in those territories, much like it did in 2012, with a range of web services and apps – but not its search engine.
In January the company launched two products intended for overseas markets – a mobile browser that came pre-installed on Orange Android devices throughout Africa, and an anti-virus app available in English and Thai – the latter an apparent bid to break the Southeast Asian market before arch-rival Qihoo.
Baidu also launched a set of English-language developer tools for its cloud software, though judging by that project’s website right now, it appears to be dead in the water. It also launched its hao123 portal in Indonesia, and revealed plans to launch its search engine in Thailand.
Mobile and the cloud
Baidu’s mobile strategy has always been tightly integrated with its cloud strategy. Not unlike Google, the company hopes that as users spend more time on their smartphones, it can learn about individuals’ habits and preferences in order to optimize its search advertising. But it also hopes to bypass the need for downloading and installing apps by rooting its products and services in the cloud, and making them accessible through its stalwart search engine.
Nearly all the Chinese tech giants offer cloud storage services, but this year Baidu made some concerted efforts to develop the ecosystem around its Deopbox-like Baidu Cloud product. In June, the company revealed it had 70 million users and was growing at a rate of 200,000 new users a day. We’ve got no numbers to compare these figures with, but if there’s competition from someone with 200,000 new users a day, it’s a formidable new rival.
Baidu officially released a few consumer gadgets for health and housekeeping this year. In addition to a router and a wifi dongle, the company came out with a household surveillance camera that stores footage in Baidu Cloud. It also inked deals to integrate Baidu Cloud with a smart blood pressure monitor and a smart weight-tracking scale.
But the biggest boon to Baidu’s mobile ecosystem this year was likely its $2 billion acquisition of 91 Wireless, the company behind leading Chinese app stores 91 Assistant and HiMarket. Baidu didn’t state the reasons for the purchase, but 91 Wireless’ access to app developers and records of user data could help Baidu beef up its current product offerings in any number of different ways.
The latter acquisition is also relevant given the apparent failure of Baidu’s mobile operating system – which we haven’t heard any news from since December 2012. The company’s Android-based OS, borne out of a desire to increase its presence on mobile, seems to be dead in the water, leading Baidu to instead pursue a strategy of acquiring firms that are strong in mobile.
Show me the media
Baidu distinguished itself from Alibaba, Tencent, and Qihoo by continuing to double down on online media.
After acquiring a “substantial majority stake” in popular video streaming site iQiyi in late 2012, the company went on to acquire PPS.tv for $370 million in May. The latter acquisition effectively pit it against Youku-Tudou in the race to capture the eyeballs of video-hungry Chinese consumers. Six months later Baidu inked a deal with Viki to bring that company’s vast library of international, subtitled television to the mainland.
By ramping up its video portfolio, Baidu is positioning itself to dominate two types of screens – mobile phones, and smart TVs, both of which are booming sectors in China. Last September, Baidu announced the arrival of its own smart TV OS, placing it alongside Xiaomi, LeTV, and more recently Alibaba and Tencent in that space.
And Baidu’s interest in media doesn’t appear to be limited to video. The company built a Shazam-esque music search engine in September, and just this week acquired e-bookstore Zhongheng for $31 million.
Soul searching
What to look out for in 2014
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