July 15, 2024

DealBook: Baidu Invests $306 Million in Travel Search Engine

Baidu's headquarters in Beijing.Simon Lim/Agence France-Presse — Getty Images Baidu’s headquarters in Beijing.

9:47 a.m. | Updated SHANGHAI –The Chinese search engine giant Baidu.com said late Friday that it would pay $306 million in cash to acquire a controlling interest in the travel search site Qunar.com.

The online travel site, which said that was already profitable, indicated that it would still pursue a initial public offering, with Baidu as a lead investor.

The deal represents one of the largest investments ever made by Baidu, which has faced fierce competition from social networking and online commerce sites.

Since Google moved its search engine to Hong Kong last year, Baidu has become an even more dominant as a search engine. But the company is also moving aggressively to diversify its online offerings to compete with Tencent, Sina, Alibaba and other big Chinese Internet companies.

In recent years, Baidu has formed a joint venture with the Japanese online shopping mall site, Rakuten, invested in a Hulu-like online video site and sought to team up with mobile phone makers that use Android operating systems in the hopes of having Baidu used in mobile search.

Qunar — which was co-founded by an American, Fritz Demopoulos, along with the Chinese-born Zhuang Chenchao and Douglas Khoo of Malaysia — is one of China’s fastest growing online travel sites. It provides up-to-date travel searches on flights, hotels and group buying.

Travel inside of China has exploded with the country’s wealth and the growth of airports and high-speed rail. Nasdaq-listed Ctrip.com is China’s best-known travel site and has a market value of about $23 billion.

Qunar was founded in 2005 and received early financing from the Silicon Valley venture firms Mayfield and GSR Ventures; it has also received financing from Tenaya Capital and GGV Capital.

“Baidu’s investment was a strategic investment,” said Mr. Zhuang, the co-founder of Qunar. “An I.P.O. is still part of our plan.”

Baidu is trading at about $129 a share on Nasdaq, valuing the company at about $45 billion — making it one of the world’s richest Internet companies.

Article source: http://feeds.nytimes.com/click.phdo?i=2b16aa4a746c617042a61283b70012a6

Speak Your Mind