Baidu mulls cloud computing acquisitions

BEIJING, CHINA: China's Baidu Inc is on the lookout for acquisitions in mobile Internet and cloud computing, part of a broader drive to bolster its presence in the increasingly competitive mobile web market.

China's top Internet search engine launched a new mobile application platform on Friday, named Baidu Yi, and offered a glimpse of its upcoming mobile operating system which it hopes will service a growing number of users accessing the Internet from smartphones and tablet computers.

Baidu Yi will enable third-party application developers to create apps such as games, maps and other tools that they can distribute or sell in a similar way to Apple Inc's App store.

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Baidu has built on its dominance of China's search market significantly since Google Inc's high-profile exit last year citing hacking and censorship concerns, and now has an over 80 percent market share among China's near half billion Internet users.

While developing its own products, Chief Financial Officer Jennifer Li said Baidu is also on the lookout for any acquisition and investment opportunities in mobile Internet and cloud computing -- using remote servers hosted on the Internet to manage and store data.

"We constantly assess our business needs and are on the lookout in the industry space for what will be a good fit for us," she told Reuters in an interview.

Baidu Yi is modelled on Google's Android mobile operating system and will be rolled out to mobile devices in the future.

MOVING TO MOBILE

A host of Chinese Internet firms and telco gear makers are launching self-developed smartphones in order to gain a foothold in a market still dominated by traditional handsets and lower-end second-generation phones.

Baidu also launched its new homepage which will add four features, including social networking functions.

However, Baidu CEO Robin Li was quoted as saying the new homepage could have a negative impact on its revenue by requiring users to register a Baidu account, potentially reducing traffic on the site. The new homepage, with more links and content, could also affect loading speed.

"We don't know how negative it will be," he said in an interview with Internet portal SohuIT.

"No matter how big the loss would be, this represents the future of the industry. If we don't do it, others might; if we don't do it now, you might be forced to do it in the future; instead of waiting for others to push you, we would rather take the initiative."

Baidu currently has around 200 million registered users, Li said.

GROWING, DIVERSIFYING

The company has also been aggressively diversifying into e-commerce, online video and online travel to bolster growth and increase competitiveness.

Alibaba Group, China's largest e-commerce firm, launched a smartphone running its own mobile operating system in late July that will feature cloud-based applications and Internet search.

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Huawei Technologies similarly launched its cloud computing smartphones in August, and Sina Corp recently rolled out a line of smartphones catering to users of its microblogging service Weibo.

Baidu recently faced criticism from China's state broadcaster CCTV over how easy it was to register and promote fake websites on Baidu. The scrutiny raised speculation among media and analysts that this could lead to tougher regulations.

Jennifer Li said that Baidu welcomed the scrutiny, as it offered it opportunities to learn and improve its products.

Li said the company's goals for Internet development in China were in line with that of the country's regulators.

"The Internet is becoming increasingly influential and everyone recognises that and I think we have the same goal, which is to make the industry healthy," she said.

Baidu's Nasdaq-listed shares are up nearly 50 percent so far this year, giving it a market value of around $50 billion.