Here’s Why Baidu’s New Service May Make You Laugh
While monetization has been a problem for the leading provider of Internet search services in China, Baidu (NASDAQ:BIDU) has been working hard to grow its presence in the mobile world. A report appearing in the publication TechInAsia announced that Baidu has developed a voice-controlled search assistant similar to Apple’s (NASDAQ:AAPL) Siri for its Android-based operating system, which will be offered on Google Play.
What is behind Baidu’s mobile push?
Like Google (NASDAQ:GOOG), Baidu has found that mobile advertisements sell for much less than PC advertisements. Because the company’s mobile search traffic is on the rise — it grew 110 percent year-over-year in the last quarter — Baidu’s need to monetize its mobile ads has become much more pressing.
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As competition increases from the Chinese Internet company Qihoo (NYSE:QIHU), one method Baidu found to boost its mobile search share and ad sales was developing a smartphone of its own. In early December, TechInAsia reported that the company had partnered with Lenovo (LNVGY.PK) to design a device, called the LePhone A586, based on Baidu’s custom OS, which is built on Android 4.0, and featuring a high-performance Qualcomm (NASDAQ:QCOM) chip and Baidu’s cloud services.
Now, Baidu has incorporated Chinese language voice assistance into its operating system that allows voice recognition searching, application downloading, and phone call making. Also, according to Benzinga, the voice assistant can ”tell jokes and give advice on a variety of topics.”
CHEAT SHEET Analysis: Will this new app be a positive catalyst for the Baidu’s stock?
One of the core components of our CHEAT SHEET Investing Framework focuses on catalysts that will move a company’s stock. Since the debut of its search service in the middle of August, Qihoo has cornered 9 percent of the market, making Baidu’s business diversification a necessity; the service will not only enable Baidu to take advantage of its giant search database but also make its brand more competitive against Qihoo.
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