Chinese internet behemoth ByteDance has completed its acquisition of local online encyclopedia service Baike.com, according to local media citing people in the know, as the world’s most valuable startup preps itself for an upcoming battle with China’s de factor king of search, Baidu.
The deal was carried through in a short span. On August 14 Beijing-based ByteDance acquired 22.22% stake of Baike to become its largest stakeholder. The move was followed by the buyout of the remaining 77.78% on August 27, making ByteDance the new owner of one of the largest Chinese answers to Wikipedia.
The acquisition of a Wikipedia-like service is believed to be critical to ByteDance’s ambition to compete with Baidu on China’s lucrative online search market.
Unlike how Google and Wikipedia are separated and independent businesses in the US, in China, Baidu and its very own Wikipedia-ish Baidu Baike work in pairs. The significance for a search engine such as Baidu to own a Wikipedia service, is that all the online search traffic is enclosed within its own ecosystem. And Baike is just one of the similar efforts Baidu has built up over the past years to enclose its traffic and users, such as Baijiahao we reported before.
A well-entrenched ecosystem is not stopping ambitious ByteDance from giving it a try, though.
Earlier in August, ByteDance officially launched its mobile-only search portal Toutiao Search whereby search results come from both web pages and contents on ByteDance apps.
Launched in 2005, Beijing-based Baike.com is the main rival for Baidu Baike. By finalizing the acquisition, ByteDance is stepping up its threat to rival Baidu, who has enjoyed a monopoly in China’s online search market ever since Google’s departure in 2010.
Baidu held nearly 77% of the search engine market, the latest data shows, and Tencent-backed Sogou, Alibaba-backed Shenma, a mobile-only service, followed by 11% and 4.41%, respectively.
However, recent years have seen its revenue flagging. It booked USD 351 million in net income in the second quarter of this year, a 62% year-on-year decline. It made a net loss of USD 49 million in the first quarter, the first time since it went public in 2005.