• Saturday, October 10, 2015

Baidu bitter over inability to acquire UCWeb

Staff Reporter 2012-06-17 08:55 (GMT+8)
The Baidu Technology Innovation Conference in Beijing in 2011. (Photo/Xinhua)

The Baidu Technology Innovation Conference in Beijing in 2011. (Photo/Xinhua)

At a June 1 conference with Baidu's partners, company CEO Robin Li dismissed claims from some companies that they will turn profitable eventually, as long they continue expanding their market shares, reports the First Financial Daily in Shanghai.

Li was maked a thinly veiled referrence to UCWeb, a leading mobile internet browser in China, which turned down Baidu's offer to acquire it, according to the report.

UCWeb had asked Baidu to buy its entire stock for US$1 billion in 2011, a deal that was rejected by Baidu. Instead, Baidu offered to buy a 49% stake in UCWeb for US$400 million, but was turned down by UCWeb.

Baidu may be interested in UCWeb because of its own late entry into the mobile internet market, thanks to Li's misjudgment that the market did not yet exist, according to First Financial Daily analysis.

Citing a report by a market analyst, the daily said UCWeb ranks second among mobile internet browsers in China in terms of the number of visitors, garnering a market share of 6.6%, while Baidu is in fifth place with a market share of 4.7%, lagging far behind the 29.6% share of the leading firm, Tencent.

Given how quickly Baidu has lost its market share in personal computers to 360, it was eager to acquire UCWeb to increase its status in the mobile market, said analyst Cheng Lingfeng.

UCWeb, which boasts 200 million users and a market share of 70% among Android-based devices, saw its revenues increase from 200 million yuan (US$316 million) in 2010 to 320 million yuan (US$505 million) in 2011, a significant growth, said the First Financial Daily. This growth is likely why UCWeb turned down Baidu's offer to buy a 49% stake.

UCWeb is trying to go public in the US, although the opportunity to do so has seemed more difficult for Chinese web companies this year.

There were 20 Chinese internet companies that went public in May. Except one, all were listed on domestic stock exchanges. That number is a 44% decrease in the amount of companies than went public over the same period last year.

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Fu Chengyu (傅成玉)

Fu Chengyu became chairman of Sinopec in 2011, having previously seved as chairman of China National Offshore Oil Corporation with broad experience of working in Chinese oilfields such as Daqing, ...