SHANGHAI New Culture Media Group Co and venture capital firm SAIF Partners have invested a total of 1 billion yuan (US$155 million) in Baidu’s video search unit.
The capital injection will turn Baidu’s unit into an independent business entity, Xiaodu Interactive Entertainment and Technology Co, that will focus on distributing professionally made online movie and TV series, the company said in a statement yesterday.
It will also allocate 500 million yuan of the investment to help video content providers promote their works through the Internet. China has a total of 504 million of Internet video viewers, according to CNNIC, a state-backed research agency.
Shanghai New Culture Media Group Co, which is listed on Shenzhen’s growth enterprise market, said in a separate statement that it will invest up to 500 million yuan and gain a 17-22 percent stake in the video search unit after the deal closes. It will use the funds to build more efficient online distribution channels.
Baidu bought a 4.8 percent stake in Hong Kong-listed theater operator and film producer SMI Holdings last year.