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Baidu Exploring Attack on Tencent Music

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Nov. 20 2020, Updated 4:58 p.m. ET

Baidu building a mobile music app

Baidu (BIDU) has formed a special team to explore the revival of its music business, according to a report from TechNode. Although Baidu was among the first Chinese technology giants to launch online music services in the country, its music venture failed to catch on, allowing the likes of Tencent Music (TME) and NetEase (NTES) to dominate the scene.

The report stated that Baidu is developing a mobile music app and planning a massive media campaign, complete with talent competition shows, to promote its revived music business.

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China’s digital music market tops $1.1 billion

Digital music consumption is on the rise in China, thanks to deeper Internet penetration in the country. There were more than 800 million Internet users in China at the end of 2018, according to government figures cited by TechCrunch. According to iResearch estimates, digital music market in China was worth more than $1.1 billion in 2018.

Baidu’s efforts to expand its participation in China’s digital music market picked up last year when the company made an invested in NetEase’s music unit called and NetEase Cloud Music.

Launching its own music app could help Baidu turn tables on Tencent Music and other rivals that benefited from its struggling music venture. Tencent Music did its initial public offering last year, which accorded it another opportunity to increase its brand awareness in China and abroad and to add to its war chest to battle competitors. Tencent Music is said to be interested in purchasing a stake in Vivendi’s (VIVHY) Universal Music Group, the world’s largest music label, according to a Reuters report.

Baidu’s revenue jumped 22%

Baidu, China’s top search engine company, recorded revenue growth of 22% year-over-year to $4.0 billion in the fourth quarter. Revenue jumped 22% at Google parent Alphabet (GOOGL) and 39% year-over-year at Yandex (YNDX) in that period. Baidu reports its first-quarter results on May 16.

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