Baidu Said in Talks to Develop Smart Televisions

Baidu Inc., China’s largest search engine, is in talks with a Chinese manufacturer to help develop televisions connected to the Internet, according to two people familiar with the matter.

The company is discussing working with Huan Technology Ltd. to develop a set-top box or a chip for use in smart TVs, the people said, asking to not be identified because the discussions are private. Huan Technology is a joint venture between Sichuan Changhong Electric Co. and TCL Multimedia Technology Holdings. TCL is the third-largest flat-panel TV maker in the world by revenue share, researcher DisplaySearch said in June.

Baidu is expanding its online video business to boost its share of a market that consultant IResearch estimates may generate 16.2 billion yuan ($2.6 billion) in revenue next year. The U.S.-listed company is competing for users with Alibaba Group Holding Ltd., China’s largest e-commerce company, which said in July it had designed a smart TV operating system and set-top box.

Baidu, based in Beijing, declined to comment in an e-mailed statement. He Dan, a spokeswoman for Guangzhou-based Huan Technology, declined to comment.

Shares of Baidu fell 2.8 percent to $135.12 in New York trading yesterday. The stock has gained 35 percent this year, compared with a 19 percent increase in the Nasdaq Composite Index.

The company last week agreed to buy a 59 percent stake in e-commerce website operator Nuomi Holdings Inc. for about $160 million.

Baidu also bought Internet video business PPStream Inc. in June for $370 million and has been combining it with, which it acquired last year, to create China’s largest online video platform.

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