Baidu buys 91 Wireless for $1.9 billion

Everyone has been talking about China for a year now. There is nothing to be surprised about. This is a huge market in its potential, which is difficult to enter due to its severe fragmentation. But it is necessary to go out.

Otherwise, it may be too late. Moreover, there is a suspicion that a certain moment has already been missed. Today, the domestic market is beginning to be cut among themselves by local giants who have plans for expansion to the west.

At least, this is what the deal between Baidu and Netdragon Websoft suggests. The first is the largest search engine in China. According to John Jordan from Pocket Gamer, he is often called Google of the Middle Kingdom.

Netdragon Websoft, in turn, is one of the central gaming companies in China specializing in the development and operation of MMO and mobile applications.

The deal, which will close on August 14, is that Baidu will acquire 57.4% of the subsidiary 91 Wireless Websoft from Netdragon Websoft for $1.09 billion, which is backed by a whole complex of top Chinese application stores. Baidu will spend another $800 million to buy out the remaining 91 Wireless stake from other owners. 

The deal, according to Baidu’s management, will allow the company to become direct competitors to the other two largest players in the mobile market – Tencent (followed by Mobile QQ and WeChat messenger) and the 360 app store. 

However, as noted in the British press, despite the impressive size of the deal, it is very controversial. Firstly, the amount that Baidu is going to spend is half of the company’s cash. Secondly, some 91 Wireless sites distribute pirated content. And, thirdly, companies have a completely different corporate culture. 

Anyway, we are witnessing the consolidation of the Chinese mobile market.

Source: 3dnews.ru and pocketgamer.biz