Deals

UCWeb: China's Last Great Tech Takeover Target

UCWeb's fast-growing mobile browser has 400 million users

Pedestrians use their mobile phones outside the Sogo department store in the Causeway Bay district of Hong KongPhotograph by Lam Yik Fei/Bloomberg

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By Bruce Einhorn

May 30, 2013 at 11:01 PM UTC

This article is for subscribers only.

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This article is part of the June 3, 2013 issue of businessweek.

It’s dealmaking time in Chinese cyberspace. As more mainlanders go online via smartphones and tablets, the country’s biggest Web players are gearing up for the era of mobile e-commerce. That’s one reason e-commerce giant Alibaba Group paid $586 million for 18 percent of Twitter-like service Weibo in April and $294 million in May for a 28 percent stake in mapping company AutoNavi. Around that time, search engine Baidu set aside $370 million to buy the streaming video service of PPS Net TV, aiming to become the leader in mobile video.

Another potential prize is UCWeb, maker of China’s most popular mobile browser. The company hit the 300 million-user mark in March 2012 and by yearend was at 400 million, says Yu Yongfu, UCWeb’s chief executive officer. More than 60 percent of China’s Android users rely on it, according to the company. Of all the acquisition targets in China, UCWeb is “probably the last one that’s worth anything,” says Michael Clendenin, managing director of RedTech Advisors in Shanghai. In theory, buying the browser operator could help Baidu as it tries to keep up with Alibaba and Tencent, China’s biggest Web company by revenue. Baidu boss Robin Li and his team “need to make a big audacious, overpriced investment to get a stake in this guy,” Clendenin says.