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Baidu Wants to Be a TV Star

Baidu (NASDAQ: BIDU  ) has carved a cozy living copying Google's (NASDAQ: GOOGL  ) successes overseas. Now it wants to cash in where Google has fallen short.

Sources are telling Bloomberg that Baidu is working with Chinese manufacturer Huan Technology on a set-top box or a smart TV chip that will help the world's most populous nation make the most of the growing popularity of connected televisions.

Landing with a thud in the smart TV market was a rare whiff for Google. It lined up a murderers' row of hardware partners, but Google TV failed to gain traction because the search giant couldn't get content producers on board with its streaming platform.

Baidu isn't likely to run into the kind of resistance that Google faced at the time, but it also won't be alone. 

The catalyst for Baidu making a big move here is that e-commerce giant Alibaba announced its entry into the smart TV market last month. If Web-tethered HDTVs represent a future computing market, Baidu knows that it's better to be early than late. 

Baidu missed out on the mobile movement, forcing it to shell out nearly $2 billion this summer to acquire the leading mobile apps marketplace provider. It still has billions in the bank, but it would rather be the leader than have to pay up to acquire it down the road.

Baidu will have something that Alibaba does not, and that's a strong presence in video. Baidu took control of iQiyi last year and snapped up PPS earlier this year. Combined, the two streaming websites place Baidu neck-and-neck with Youku Tudou for market supremacy. 

Sure, owning a big video site or two isn't enough. Google owns YouTube, and the world's largest video-sharing site wasn't enough to ram Google TV into more living rooms. However, this will be a differentiator for Baidu in a young market where the top dog has yet to be decided.

Connected TVs won't be as disruptive as mobile has been to desktop search. It's actually incremental, largely replacing time spent viewing conventional television. However, Baidu has a shot to excel where Google has not, and that would be enough to make the revitalized dot-com darling ready for prime time. 

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