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The logo of Baidu is displayed at its headquarters in Beijing. Baidu, China’s largest internet search service, has led a new round of investment in NetEase Cloud Music. Photo: Agence France-Presse

Baidu steps up investment in mobile content with stake in NetEase music unit

The investment in NetEase Cloud Music comes amid Baidu’s stepped-up efforts to build an ecosystem of content and battle for user attention as consumers upgrade their spending habits

Baidu

Baidu led an investment round in NetEase Cloud Music, China’s fourth-largest online music streaming app, as the search-engine operator continued acquiring mobile content to enrich its suite of services.
The two companies will carry out in-depth cooperation in content, copyright and traffic sharing, according to the Beijing-based search giant founded by billionaire chairman Robin Li Yanhong. No investment details were disclosed in the statement.

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

The investment in NetEase Cloud Music comes amid Baidu’s stepped-up efforts to build an ecosystem of content and battle for user attention as consumers upgrade their spending habits, according to the statement.

China’s entertainment industry is in a “golden period” as the country’s younger generation searches for premier content and deeply-involved experience, according to a report by data provider Pintu in August.

Last year, the industry saw more than 1,700 investments, four times the volume of deals for retail according to Pintu. Investment in the first six months rose 16 per cent from a year earlier to 62.9 billion yuan (US$9 billion).

Nasdaq-traded Baidu is having to play catch-up as it had failed to latch on to the shift in consumer usage from desktop to mobile, despite having an early start in music search and downloads during the PC era, according to Xiong Hui, an analyst with research firm iResearch.

“Mobile end is a different front, where user experience is most important,” Xiong said. “Supporting NetEase is a strategic move for Baidu.”

With NetEase remaining the controlling shareholder of its online music arm, Baidu will become a strategic partner. The latest fundraising round also included General Atlantic and Boyu Capital.

Consumers will be able to access NetEase Music through various applications and environments such as home appliances or in cars through Baidu’s voice-command artificial intelligence operating system DuerOS, according to the company. Both parties will also contribute toward enriching the content in intelligent hardware.

In April, Baidu and Tencent invested in Pear Video, an online short video platform. The company also led a round of financing in audio content platform Qingting FM last September.
New York-listed Alibaba is the parent company of the South China Morning Post.

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