Baidu shares up after deal to buy app store

Baidu shares up after $1.9 billion deal to buy Chinese mobile applications store 91 Wireless

Associated Press

NEW YORK (AP) -- Shares of Baidu Inc., which operates China's most popular search engine, climbed Tuesday after it said would buy 91 Wireless, a distributor of smartphone applications and games, for $1.9 billion.

THE SPARK: Baidu said Tuesday that it would buy 91 Wireless, which operates two Chinese applications stores, 91 Assistant and HiMarket. 91 Wireless says it is China's biggest third-party app distributor by both active users and accumulated downloads.

THE ANALYSIS: Cynthia Meng at Jefferies & Co. said the acquisition should help Baidu build its position in the Chinese mobile Internet and gaming market, helping close the gap with competitors like Tencent. She raised her price target on the shares to $115 from $91, but kept a "Hold" rating.

SHARE ACTION: Baidu U.S.-listed shares rose $5.30, or 5.2 percent, to $106.89 in morning trading. Over the past year, they have traded between $82.98 and $134.71.

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