The acquisition of the Chinese response to Wikipedia has intensified the rivalry between ByteDance and Baidu
The Chinese giant Internet ByteDance has completed its acquisition of the local online encyclopedia service Baike.com. This is confirmed by the local media, who believe the acquisition of a service similar to Wikipedia is fundamental for the ambition of ByteDance to compete with Baidu in the profitable Chinese market of online research.
The agreement was completed in a short time. On August 14, ByteDance acquired 22.22% of Baike‘s capital to become the largest shareholder. The move was followed by the acquisition of the remaining 77.78% on August 27, making ByteDance the new owner of one of the major Chinese responses to Wikipedia.
Owning an online encyclopedia means forfeiting all online search traffic
Google and Wikipedia stand out as separate and independent businesses in the United States, while Baidu and Baidu Baike – in China – work in pairs. The significance, for a search engine like Baidu, of having a service similar to Wikipedia, means that all online search traffic is contained in its own ecosystem.
At the beginning of August, ByteDance officially launched its search portal dedicated exclusively to mobile devices called Toutiao Search, according to which the search results come from Web pages and contents of the ByteDance apps.
Baidu held almost 77% of the search engine market
Launched in 2005, Baike.com based in Beijing is Baidu’s main rival. Concluding the acquisition, ByteDance is intensifying its threat to compete with Baidu, which has enjoyed a monopoly in the Chinese online search market since its release from Google in 2010.
Baidu held almost 77% of the search engine market, according to the latest data. Sogou supported by Tencent, and Shenma, supported by Alibaba, followed in the rankings respectively at 11% and 4.41%.
However, in recent years, revenues have decreased. In fact, Baidu reported a net profit of $ 351 million in the second quarter of this year, down 62% year-on-year. Instead, in the first quarter, it recorded a net loss of $ 49 million; the first time since it was made public in 2005.