Lenovo CEO Yang Yuanqing's appointment to the board of director is seen to benefit both Baidu and Lenovo. (Photo : www.china.org.cn)
Baidu's recent appointment of Lenovo CEO Yang Yuanqing to its board of directors is seen to help the two companies face the challenges of the mobile age, the Time Weekly reported.
Baidu made the announcement about Yang's appointment on Sept. 30, hoping that the move will usher Baidu into a new stage of growth.
Yang and Baidu CEO Robin Li were said to have a good personal relationship, the report said.
Baidu has expressed interest in financing Lenovo's Beijing Shenqi Technology unit, which recently launched a smartphone model, Zuk.
Wang Yanhui, secretary-general of the Mobile China Alliance, said that Baidu had likely approached Yang to tap on his experience in overseas acquisitions, considering Lenovo's purchase of Motorola Mobility and IBM's low-end server business.
Wang added that Yang's closer ties with Baidu can help Lenovo learn about the Internet business, since his company's success has created a hurdle in its expansion into the mobile age.
On Sept. 30, Lenovo announced the departure of Liu Jun, who served 22 years in the company. He stepped down in June as head of the mobile business and was replaced by Shenqi CEO Chen Xudong.
"The situation today is largely created by us relying on past experiences in a new business. We tried to replicate our success in the PC business on handsets. It is this, deeply rooted in our genes that has led to today's results," Yang told the company in June.
"I told you several times last year, 'wake up!' I even said that even hitting you with a hammer won't wake you, and that you are moving too slowly and missing opportunities," Yang added.
No one can be blamed for Lenovo's past glory becoming baggage today because it has been caused by the company's corporate culture, organization and allocation of resources, Wang said.
After it acquired Motorola and IBM's server business, Lenovo relied on three areas--PCs, corporate business and mobile devices--in 2014. However, the company incurred pre-tax losses of $40 million and $292 million in its corporate and mobile business sectors, respectively, during the fiscal first quarter.
Lenovo's sales and net profits in its PC business declined, which accounted for 68 percent of its income, dropping by 13 percent and 8 percent, respectively, during the quarter.
Baidu, on the other hand, continues to dominate the desktop online search market, by trying to develop portals to attract traffic from mobile device users, being unable to offer search results from popular mobile phone apps such as WeChat.
