Internet-search company Baidu Inc. said it would pay $370 million to acquire the online video unit of PPStream Inc., a popular streaming-television service in China, making it one of the most significant players in online video in the country.
Chinese Internet companies have spent heavily in recent years to purchase original content, hurting their margins. But many analysts say that in the long term, online video will become highly profitable because of the high demand for video ads that target specific segments of viewers.
Baidu has been under pressure in recent months to secure more revenue from its online search business. Users in China increasingly use smartphones to access the Internet. Advertisements on smartphones aren’t as profitable or popular as those on the general Internet.
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Paul Mozur, Wall Street Journal via CHINA US Focus http://feedproxy.google.com/~r/ChinaUsFocus/~3/UJqxQ6dEQYI/
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