Baidu: Aggressive Moves into Mobile, Payments
A common theme among the Chinese tech giants is a close similarity to a successful Western tech formula that has been adapted to the unique Chinese business environment. Nowhere is this more apparent than with Baidu, a company that bears an uncanny resemblance to its American counterpart, Google. Baidu, however, has first-mover advantage, both in the development of its ranking algorithm, and its move into monetization through ads. Baidu transitioned quickly into promoted search and gained a dominant position on search revenue in China.
This healthy revenue stream has allowed for Baidu’s aggressive expansion into the mobile space, marked by a number of small acquisitions, culminating in its largest acquisition in the summer of 2013. Baidu acquired mobile app marketplace 91 Wireless for $1.9 billion. In addition to huge investments in Chinese firms, Baidu can also take some credit in the recent resilience of Bitcoin, the popular and often controversial crypto-currency.
Baidu has begun accepting Bitcoin as payment, and this vote of confidence has significantly bolstered the value of the currency which had recently been threatened by regulatory concerns.
Tencent: A Diverse Portfolio
Tencent maintains the most diverse array of technology products amongst the Chinese tech giants. Tencent's primary product is the messaging platform QQ, but it also maintains a mobile messaging WeChat, and many other games and apps. The bulk of Tencent’s revenue, however comes from value add and virtual goods that are sold as part of the companies various multiplayer games that are cross-promoted all across the company’s product line.
In keeping with the diversity and mobile focused orientation of Tencent, the company has looked to establish an equally diverse collection of investments. The company has built a portfolio of over $2 billion in overseas investments. These investments range from gaming companies like Epic Games and Activision/Blizzard, to the popular social shopping site Fab.com. Recent rumors around Tencent are that it will take a significant position in the latest round of financing for popular mobile photo sharing service Snapchat.
Alibaba: Yahoo and Beyond
Alibaba has grown into a global e-commerce force by leveraging the massive manufacturing power of China and exposing a B2B channel to the rest of the world over the web. It currently boasts annual sales in excess of both Amazon and eBay combined. The massive growth in Alibaba has been credited as one of the driving forces behind Yahoo’s recent resilience and acquisitions. Yahoo bought a stake in Alibaba in 2005, and the value of this investment may make up a large portion of Yahoo's overall value.
In addition to holding significant influence over Yahoo, Alibaba has also branched out into overseas investment. The company has recently formed a dedicated U.S. investment arm, but has already participated in a funding round for ShopRunner, a company hoping to be a competitor to Amazon, and smaller e-commerce companies Fanatic and Quixey.
It is evident that the financial force held by these Chinese companies, and the current push to assert dominance in the mobile space will make further investments by these companies increasingly likely. Look for these tech giants to become an growing force in the global tech landscape for years to come.