Chinese search engine firm plans to build a set-top box or a chip for incorporation into smart TVs.
Chinese internet search engine Baidu is planning to enter the smart TV industry.
It is reportedly negotiating with manufacturer Huan Technology to build a set-top box or chip to incorporate into a smart TV.
Baidu is planning to boost its online video business to improve its share in the global market, which is expected to generate $2.6bn in revenue come 2014, according to Bloomberg.
Western competitors including Apple are also working on smart TVs.
However, a Strategy Analytics report revealed that smart TVs pale in comparison to demand for tablets and smartphones when it comes to connecting to the Internet.
According to the report, even though half of media entertainment users used smart TVs, very few of them used it as their main source, mainly due to the ease in using tablets, smartphones and other connected devices.
Recently, Baidu agreed to acquire 59% in e-commerce website operator Nuomi for about $160m.
The search engine firm also launched an app preview service known as Light App, allows users to preview apps without downloading them to their devices.