China's internet giants on acquisition spree

BEIJING: China's Internet giants have gone on a new acquisition spree in recent months as they ramp up their efforts to diversify their business amid the industry's constantly changing dynamics.

Alibaba Group, China's leading e-commerce firm, announced last week that it will pay USD 294 million for a 28 per cent stake in a digital mapping company, AutoNavi Holdings Ltd.

The move follows Alibaba's recent deal to acquire 18 per cent share in Sina Corp's microblogging service, Weibo. It is the giant's latest attempt to map out a strategy in the key mobile internet market, state-run news agency Xinhua reported.

Li Zhi, an analyst with Internet service provider, 'Analysys', said that rather than developing new products on their own, the internet giants have preferred mergers and acquisitions to consolidate their position.

Earlier this month, China's online search engine leader, Baidu Inc, announced its plan to buy the online video business of PPS to rival industry leader 'Youku Tudou', which was created last year through the merger of the country's two video giants, Youku and Tudou.

This purchase is Baidu's latest step to diversify beyond its core sector, the report said.

The string of deals has highlighted the heated competition among Internet firms to dominate the mobile internet market, as an increasing number of people are surfing the net through their mobile devices.

Tencent, which has so far attracted 300 million users to its popular voice messaging platform 'WeChat', is widely regarded as having secured a dominant seat in the mobile internet market.

However, Ma Huateng, Tencent's chairman and CEO, took a cautious view about the company's position.

"No matter how well-placed we are now in the mobile market, a slight oversight may cause a shipwreck," he said at a conference earlier this month.

According to data from the China Internet Networks Information Center, China had 420 million mobile internet users as of 2012 end.

With the market potential yet to be fully tapped, the internet giants' mergers and acquisitions is likely to go on for a while, Huateng said.