Baidu Inc. (NASDAQ: BIDU) has signed a definitive agreement with Netdragon Websoft Inc. to buy out the latter’s stake of 57.4% in 91Wireless Websoft, a leading mobile app developer and online games operator. Baidu will also buy out the other shareholders for a 100% stake in 91Wireless Websoft in an all cash deal of $1.85B. This deal follows the March acquisition of online video services PPS net, which along with Baidu’s iQiyi.com have catapulted Baidu to becoming one of the biggest mobile video platforms in China.
These acquisitions are in line with the company’s strategy to strengthen its foothold in the mobile space after the company saw its mobile share decline in Q1 2013 to 66.9% from 77.5% in June 2012. We view these acquisitions as a positive move from the company as the number of smartphone users in China is on a tremendous rise with an average growth rate of 20% in the period from 2008-2012. We guess that sort of a growing market is where any company would want to be in, and so we believe that Baidu is headed in the right direction.
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