China's biggest search engine Baidu enters mobile browser fight

Mon Sep 3, 2012 3:58am EDT

* Baidu launches mobile browser to compete with UCWeb, Google, Apple

* Baidu's mobile browser highlights shift to mobile, cloud computing

* Baidu's monetization of mobile is medium-term concern - analyst

BEIJING, Sept 3 (Reuters) - China's dominant search engine Baidu Inc rolled out a mobile browser on Monday to help secure its share in a mobile Internet market that surpasses the U.S. population in size and to fend off smaller rivals such as Qihoo 360 Technology Co.

In China, the number of users who access the Internet from mobile phones has risen to 388 million, according to a government report in July, outstripping the number of users who access it from a desktop computer for the first time.

The Baidu Mobile Browser, which will compete with UCWeb Inc's UC Browser, Google Inc's Chrome and default Android browser, and Apple Inc's Safari, is about 20 percent faster than its rivals based on internal tests, Li Mingyuan, Baidu's general manager of mobile and cloud computing, told reporters on Friday at a pre-launch briefing.

Baidu's mobile browser also allows users to access a plethora of web-based mobile applications (apps) and run high-definition video through the browser without having to download apps or supporting software.

The browser, together with Baidu's other mobile products such as its mobile operating system and cheap smartphones launched with partners, forms the core of what Baidu hopes will eventually become a source of revenue.

"Monetizing mobile is hugely important for Baidu," said Michael Clendenin, managing director of RedTech Advisors, who added that the drive to monetize would be a medium-term concern for Baidu as its advertising clients still need to create mobile-friendly websites.

The shift to mobile could pose problems for Baidu if it can't find a way to make money from search traffic. Baidu currently makes the bulk of its revenue from users searching from laptops and desktops.

Baidu's goal is for 80 percent of China's Android handsets to have downloaded the Baidu Mobile Browser by the end of 2012, Li said.

The Baidu Mobile Browser also comes as Baidu is fending off threats on its home turf. Anti-virus software firm Qihoo 360 Technology's entry last month into search caused Baidu's shares to tumble 17 percent to date.

Baidu is also moving into cloud computing, a term used to describe data storage or processing on the Web.

Chief Financial Officer Jennifer Li said on Monday the firm will invest more than 10 billion yuan ($1.6 billion) to set up its cloud computing centre.

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