In the biggest acquisition deal in the history of China's Internet companies, the country's largest search engine operator, Baidu, said it's acquiring third-party application store operator 91 Wireless for US$1.9 billion.

The deal surpassed the value of Yahoo purchase of a 40 percent stake in Alibaba for US$1 billion in 2005.

Baidu has signed a memorandum of understanding with NetDragon Websoft Inc to buy a 57.41 percent stake of 91 Wireless for US$1.09 billion from the Hong Kong listed company and also agrees to take the remaining stake from other shareholders upon their approval, according to a stock exchange filing today.

NetDragon's stock fell 16.6 percent by 1 pm as investors saw less profit after the sell off of 91 Wireless from the parent company.

91 Wireless serves as a third party mobile application distribution site and allows smart phone owners using either the Android or iOS operation system to easily access and manage the mobile applications on their phones.

Baidu has been driving its mobile traffic in the past few years and stepping up collaboration with mobile software developers by offering them incentives in order to attract users and fight off rivals such as Tencent and Sina.

Mobile app stores have become an important channel for Internet visitors as the number of mobile Internet users added 18.1 percent from a year ago to 420 million by the end of 2012, and it remained the most widely used Internet access method among around 600 million Chinese web users, according to the state-backed China Internet Network Information Center.