Baidu to make more acquisitions in mobile in 2014

Baidu Inc, China's most-used search engine, is expected to make more acquisitions to boost its mobile business, a move intended to capture growth in the rapidly changing Internet landscape.

The United States-listed company saw its investment in mobile in 2013 pay off with mobile accounting for more than 20 percent of Baidu's total revenues in the fourth quarter of last year, said the company, which announced its unaudited finance report early on Thursday.

Baidu intends to grow the share because it sees tremendous opportunities beyond search, the company's core and dominant business.

"Whenever there is the opportunity to undertake an acquisition to buy us either time or resources or talent, we will be open for that," Robin Li, chief executive officer of Baidu, said in a conference call after Baidu announced its revenue jumped more than 50 percent year-on-year in the fourth quarter of 2013.

The company is preparing to deploy cash aggressively wherever necessary with a disciplined approach, said Jennifer Li, chief financial officer of Baidu.

Robin Li didn't specify a list of companies in which Baidu wants to invest. But Baidu has singled out four strategic areas in which it is interested in terms of continuing to build the company's leading position in China's Internet world. The four areas are mobile and cloud, location-based services, customer products, such as gaming and music, and international operations.

In China, where more than 5 billion people have access to the Internet through mobile phones, going mobile is seen as a core strategy for all of the country's three Internet giants: Baidu Inc, Tencent Holdings Ltd and Alibaba Group Holding Ltd.

In addition to organic growth, Baidu made a move to boost its mobile business by purchasing app store 91 Wireless for $1.9 billion in August last year. The move contributed to the increasing share of mobile business in Baidu's revenue mixture.

According to Li, the more-than-20-percent of Baidu's total revenue contributed by mobile in the fourth quarter of last year was up from 10 percent in the second quarter in the same year.

However, analysts say Baidu still has a lot to do to catch up with Tencent and Alibaba in terms of mobile expansion.

Tencent, owner of the wildly popular mobile messaging app WeChat, and China's e-commerce king Alibaba, are in the race to dominate China's mobile Internet world with aggressive investments.

Both Tencent and Alibaba have spent big on acquisitions. Earlier this month, Alibaba offered to buy full control of digital mapping company AutoNavi Software Co Ltd. The two companies are also in a battle to lead China's taxi-booking app industries by offering cash backs to taxi drivers and passengers.

"Both Tencent and Alibaba have established their territory in mobile payment and mobile social apps and they are likely to continue to invest heavily in mobile businesses. However, Baidu has been 'quiet' (without making any moves) after acquiring 91 Wireless," said Lu Jingyu, an analyst of mobile Internet with iResearch Consulting Group.

Compared with Tencent and Alibaba, which are eager to build up a mobile ecosystem, Baidu seems focused only gateway entyerprises, said Lu.

She said it would be difficult for Baidu to find an appropriate candidate to acquire because most of them have already been taken over by other Internet giants.