Beijing-based Baidu.com Inc. (Nasdaq:BIDU), the Chinese-language Internet search portal, said Tuesday it’s buying the online video operations of eight-year-old Internet video provider PPS for $370 million.
The move is a bid by Baidu to expand its content mix. Once the acquisition is completed in the second quarter, Baidu will become China’s largest online video platform by total number of mobile users and viewing time. The operation will be merged with Baidu’s online video portal, iQiyi.com.
The company is trying to maintain its share of the crowded online video market in China. Like elsewhere, Chinese consumers are increasingly gravitating toward watching video content on smartphones, and advertisers tend to prefer buying space from providers of online videos compared with other types of Web content. Competitors include Sohu.com Inc (Nasdaq:SOHU) and Youku Tudou Inc (NYSE:Yoku), both headquartered in Beijing, and Tencent Holdings Ltd (HKG:0700) of Hong Kong.
Baidu reported that revenue was up 40 percent to $961 million and profits up 5.7 percent to $356 million in the first quarter. The company said late last month that it topped 100 million daily mobile users, a 25 percent increase from the fourth quarter of last year.