Baidu, the largest search engine on the mainland, sold its internet television channel to UiTV because it was unwilling to further develop the online video business, analysts said.
Baidu's management did not believe in the business model of online video, said an analyst. 'Infrastructure and bandwidth requirements for providing online video services are huge. Baidu did not think the investment was worthwhile for the traffic it could bring.'
On Sunday, Baidu sold the channel to UiTV, a Beijing internet television platform operator.
'It is a perfect deal for Baidu,' said Jacky Huang, digital marketplace research analyst at IDC China. 'Baidu got US$15 million, which is more than its investment in the channel.
'And it is holding on to 8.3 per cent of UiTV. So, if online video services really take off on the mainland, it still benefits.'
There would also be fewer problems with copyright issues, as UiTV would handle them now, Mr Huang said.