It’s been a long time coming — plans for a mobile content partnership between NTT Docomo and China’s search giant Baidu were announced a year ago — but today it’s finally happened: the Japanese telco has announced the completion of their $22.5 million (¥1.78 billion) investment in a joint venture in China, Baidu Yi Xin. Docomo becomes a 20 percent shareholder in the new mobile content distribution platform, with Baidu holding the remaining 80 percent. The two have also announced the first apps to come out as a result: they will be games and other services from Japan’s DeNA, which is taking its content, originally created for the Japanese market, and localizing it for China, starting in August.
We’ve written quite a bit over the last week about the increasing amount of non-Chinese consumer content that is coming to market on the Mainland, and this is another example of how international brands are partnering with China’s biggest consumer players to put that into effect. In addition to today’s deal, which aligns Docomo with China’s equivalent of Google, others have included a deal announced earlier today between video site Viki and China’s equivalent of Facebook, Renren, (which also will have Japanese content as a focus) as well as a deal between China’s YouTube, Youku, and NBCUniversal for feature films.
Like Google, Baidu, which has a business based largely around search advertising — Baidu’s share in China is 80 percent. And also like Google, it has been getting very serious about its activities in the mobile market, perhaps taking a cue from Google and its own huge steps with Android.
In China, it’s almost even more imperative to focus on mobile for future growth: the country is now the biggest mobile market in the world, with growth there far outpacing growth in fixed broadband. There are now more than a billion mobile subscribers, and this year China will also become the biggest smartphone market in the world. But as others have pointed out, the key right now is to try to squeeze more money out of those huge numbers. Baidu may also be taking a cue from investors, some of whom are punishing its stock on worries that it may be too over-reliant on those search revenues in their core business, and not diversifying enough.
That has led Baidu to creating its own forked Android OS and putting it on its own devices, as well as working on apps for other platforms like iOS, where it is the default search provider. And Baidu looks like it will also be developing more on Windows Phone soon, too.
But JVs are notoriously hard to get right, and Baidu in fact doesn’t have a brilliant recent track record. A $50 million partnership with Japan’s Rakuten for an e-commerce portal, Lekutian, closed its doors in April, less than two years after launch, after failing to pick up enough users.
For Docomo’s part, the company is the leader in mobile in its own market — and was a very early trailblazer in mobile content in general with its i-mode platform created at a time when many people in the U.S. and Europe still didn’t even own a basic device.
But the islands of Japan have their limits, so it’s always looking further afield for its next moves. That’s had mixed success so far — plans to make i-mode as popular in Europe as it was in Japan, for example, never really panned out (more challenges for JVs). But more recently it has been increasing its content activities outside of Japan again. Not just with this Baidu JV but also with acquisitions in Europe, where earlier this year it said it would pay up to $300 million to buy another early mobile content player, Buongiorno in Italy. If things go to plan in China, we might see some of that Buongiorno content making its way there, too.
NTT Docomo is Japanâ€™s leading mobile communications company. The number of customers exceeds 50 million in Japan. docomo mainly provides phone, web (i-mode for mobile phones), and mail (i-mode mails, Short Mails, and SMS) services. Docomoâ€™s parent company is NTT, Japanâ€™s biggest telecommunications companies. In a strategic decision to put more emphasis on mobile phone operations, docomo was spun off in 1991 as a wholly self-owned subsidiary. The Japanese government is the top shareholder.
Baidu is the largest Chinese language search engines. Baidu’s mission is to provide the best way for people to find information online, including Chinese language web pages, news, images and multimedia files though links provided on their website. In addition to serving individual Internet search users, Baidu also provides a platform for businesses to reach potential customers online. The company’s online marketing services include auction-based P4P and tailored solutions. via: Baidu