Baidu OK to sharing ad sales with Apple
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E-mail Agencies via Shanghai Daily, June 15, 2012
Baidu Inc Thursday said Apple Inc will be entitled to a share of advertising sales after the Chinese company's search engine was added as part of a software upgrade for iPhones in China.
The revenue-sharing deal with Apple follows similar accords between Baidu and manufacturers of handsets that use Google Inc's Android operating system, said Wang Jing, vice president at Beijing-based Baidu. He declined to disclose the commercial terms.
Apple said this week that it will offer Baidu's search engine as an option for iPhone and iPad customers, and add Chinese language support for its Siri voice technology, as the world's most valuable company tailors its products for Chinese consumers. Baidu, which handles about 80 percent of China's web searches, is ready to incur costs to add smartphone users by offering services such as music streaming for free, Wang said.
"Previously they were sharing revenue with websites to bring in search engine traffic, and now they are sharing it with smartphone manufacturers," said Eric Wen, who rates Baidu a "buy" at Mirae Asset Securities in Hong Kong. He estimated Baidu distributes under 10 percent of revenue generated from smartphones to device makers.
Baidu needs to invest in their mobile Internet operations as more people in China access Internet services on smartphones, Wen said.
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