Baidu invests in NetEase to build a content ecosystem



Baidu steps up investment in NetEase Cloud Music as consumers upgrade their spending habits


To enrich its suite of services, Baidu, the most important Chinese internet search engine company, stepped up investment in mobile content with stake in NetEase music unit. The purpose of the Chinese search engine, in fact, is to build an ecosystem of content and capture the attention of users.

NetEase Cloud Music, China’s fourth-largest online music streaming app, is the perfect candidate to the purpose of Baidu. According to the Beijing-based search giant founded by billionaire chairman Robin Li Yanhong, the two companies will carry out in-depth cooperation in content, copyright and traffic sharing.


Baidu Inc led an investment round in NetEase Cloud Music


According to an August report by QuestMobile, an internet data services provider, NetEase Cloud Music ranks ahead of Alibaba Group’s Xiami in the number of monthly active users and behind Tencent Holdings-affiliated Kugou Music, QQ Music, Kuwo Music.

Baidu is struggling to build an ecosystem of content and conquer the attention of users because China is passing, according to a report from the Pintu data provider in August, a golden age for entertainment, brought forward by the younger generation of the country.

With NetEase remaining the controlling shareholder of its online music arm, Baidu will become a strategic partner and consumers will be able to access NetEase Music through various applications and environments.


Baidu is having to play catch-up as it had failed to latch on to the shift in consumer usage from desktop to mobile


According to Pintu, the entertainment market is in turmoil, last year, in fact, the industry saw more than 1,700 investments, four times the volume of deals for retail. While investment in the first six months rose 16 per cent from a year earlier to 62.9 billion yuan.

According to Xiong Hui, an analyst with research firm iResearch, Baidu is having to play catch-up as it had failed to latch on to the shift in consumer usage from desktop to mobile: “Mobile end is a different front, where user experience is most important,” Xiong said. “Supporting NetEase is a strategic move for Baidu”.



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