Baidu said Apple will be entitled to a share of advertising sales after the Chinese company’s search-engine was added as part of a software upgrade for iPhones in China.
The revenue-sharing agreement with Apple follows similar accords between Baidu and manufacturers of handsets that use Google’s Android operating system, Wang Jing, vice president at Beijing-based Baidu, said in a phone interview today. He declined to disclose the commercial terms.
Apple said this week it will offer Baidu’s search-engine as an option for iPhone and iPad customers, and add Chinese- language support for its Siri voice technology, as the world’s most valuable company tailors its products for Chinese consumers. Baidu, which fields about 80 percent of China’s Web searches, is prepared to incur costs to add smartphone users by offering services such as music streaming for free, Wang said.
“Previously they were sharing revenue with websites to bring in search-engine traffic, and now they are sharing it with smartphone manufacturers,” said Eric Wen, who rates Baidu buy at Mirae Asset Securities in Hong Kong. He estimates Baidu distributes less than 10 percent of revenue generated from smartphones to device makers.
Baidu is sharing advertising revenue with hardware partners to encourage them to install its search-engine on their products before shipping. About 80 percent of branded phones based on the Android technology have Baidu preloaded, billionaire Chief Executive Officer Robin Li said in April.
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