This morning in Shanghai, I got an amusing email from the company behind China’s leading mobile browser, UCWeb. They wanted to point out to me, and seemingly a bunch of other journalists behind the bcc line, that search leader Baidu was trying to acquire the company.
“The following is an article translated into English about a recent speculation that Baidu is planning to buy UCWeb,” read the message, with no apparent qualms about the barefaced self-boosterism. “Although this article was not written by us…it does provide an interesting view that the mobile internet industry and UCWeb does hold value.” The article, which seems like it was translated by a robot from the 70s, is almost indecipherable, but it suggests that Baidu at least has strong interest in UCWeb.
The rumor, helpfully spread by one of its subjects, found its way into the press, and Marbridge Consulting picked it up for its newsletter. Because Baidu has no share of the mobile browser market, it could make sense for the company to acquire UCWeb, Marbridge said. The newsletter pointed out that according to Baidu’s own analytics, UCWeb accounts for 33.2 percent of total third-party browser page views, while Tencent’s Mobile QQ Browser accounts for 14.8 percent, and Opera accounts for 1 percent.
Baidu wouldn’t comment on the rumor, and neither, hilariously, would UCWeb. It’s kind of like UCWeb has pulled an inverse Dick Cheney. The former US Vice President was believed to have been a master of leaking stories to the press on an anonymous basis, which he would later cite in support of whatever argument he was trying to make to the public. Except in this case, UCWeb seems to be spreading a story in the hope that journalist will request comment, which the company can then deny.
The strange thing is, this ham-fisted PR attempt has probably worked in UCWeb’s favor. In truth, it’s actually highly likely that Baidu has been talking to the UCWeb about a possible deal. Baidu, like Google, is weak on mobile and is in danger of being a one-trick pony, making money on search advertising and not much else. As mobile quickly becomes the dominant Internet paradigm in China, Baidu is at risk of being left behind. If Baidu were to acquire anyone, it could do worse than UCWeb, which has a history of innovation, a strong domestic user base, and is expanding in the developing world.
But few people would have guessed that Baidu was mulling an acquisition of UCWeb. That’s largely because, among Chinese Internet companies, there is not a strong culture of acquisition. Many of the giants would rather build clones of enticing products than get the wallet out. But if any company is going to spend money on an acquisition, it’s more likely to be a needy Baidu than many others. Last year, it
picked up took a majority stake in travel portal Qunar for $306 million, a deal that some people in the Chinese Internet industry hoped would signal the beginning of a new era of acquisitions. That hasn’t really come to pass.
Perhaps, then, UCWeb is trying to stoke the market appetite for acquisitions, while reminding the industry that it could be worth a few dollars. Or maybe it is trying to play off one potential buyer against another, thereby raising its eventual sale price. Or maybe it is trying to stoke perceived value with a longer term view to an IPO. Or maybe it just wants a bit of press.
Whatever the case, it’s hard to argue that, even with its shameless and transparent rumor-flogging, UCWeb wasn’t successful in its mission. The Chinese Internet is full of quirks, charms, and curiosities, and this is just further proof that none of that is going away in a hurry.