Chinese search engine company Baidu Inc. has acquired PPS, an Internet video company, for USD370 million and it will integrate PPS with to provide better services to users.

Tang Hesong, general manager for Baidu’s enterprise development department, told local media that scale and mobility are the core strategic factors for the success of the video business. Baidu’s acquisition of PPS and integration with Iqiyi will enhance the competitiveness of Iqiyi. Tang said they believe the integration of PPS and Iqiyi is highly complementary, and will bring benefit to users, customers, and the healthy development of the entire online video industry.

Gong Yu, founder and chief executive officer of Iqiyi, said that the integration of Iqiyi and PPS will further improve market concentration, which will play a positive role in the healthy development of the Chinese Internet video industry. The collaboration effect will help the new company provide better content and experiences to users while offering more market value to advertisers.

Zhang Hongyu, founder and chief executive officer of PPS, said that with a history of eight years, PPS is one of the earliest Internet video brands in China. They are excited to expand the future market and lead the changes in the industry along with Iqiyi. The two parties will jointly promote the integration of their resources and teams to maximize the combined value and to stimulate the progress and mature of the Chinese Internet video industry.

On the completion of the integration, PPS will become a sub-brand of Iqiyi. Gong, as the chief executive officer, will be fully responsible for the management of the new company. Meanwhile, Zhang will work with Xu Weifeng, another founder of PPS, as joint-president, leading new business expansion.