Baidu, the leading search engine in China, is expanding its technical reach by purchasing companies in a number of other technology fields. The most recent investment is Qunar.com, a travel site, which Baidu is buying for $306 million (U.S.). The investment will be funded by a loan from an unspecified third party, and will be finalized in the third quarter of this year.
Qunar translates most closely as “Where do you want to go?” It’s among the three top travel sites in the country, with the other two being CTrip and Elong. Qunar provides hotel information, travel packages, flight data and tickets, comparison pricing, visa services, and other travel-related services. Baidu’s CFO, Jennifer Li, said that, “Travel has long been one of the top categories on Baidu, and the number of travelers in China has been growing very rapidly, so this is a market of obvious strategic importance to us.”
The investment is reminiscent of Google’s purchase of ITA and Bing’s various travel-oriented acquisitions and features. Search sites around the globe are focusing in on search as one of the most crucial sectors. In China, Baidu’s investment represents at least one additional asset, however: a further lockout of Google. Google has a fairly small holding in China, largely because users are redirected to the Hong Kong site where Google can evade Chinese censorship of search results. The 19.2% search share that Google maintains continues to decline, and failing to give a competitive product to Baidu’s China-specific travel data certainly won’t help.
One of Baidu’s other competitors is a likely motivation. Tencent Holdings bought a 16% share of Elong (mentioned above), equating to an $84.4 million investment, and established its own travel technology portfolio.
[Sources include: SF Gate]
