Over the past few months, Baidu Inc (ADR) (NASDAQ:BIDU) has been seeking investment opportunities especially in online travel agents and group buying sites.
The search is still on and Baidu’s chairperson, Robin Li is still pushing to find more income generating businesses for the company. Speaking during an interview in Beijing a week ago, Mr. Li stated that he prefers investments where the business is already established, rather than where effort has to be employed to build the business. He also stated that timing and speed are very important. He prefers getting into the investment in a speedy manner and buying is usually a faster alternative to building.
Mr. Li founded the company more than a decade ago, and it has blossomed into China’s best search engine provider. Mr. Li has been seeking new businesses that will keep the company afloat and above the competition in the long run. The company has invested more than $5 billion since 2011 to expand its reach into offline services such as education loans and home delivery. Mr. Li also noted that it I never easy to find ideal investments despite having $12 billion for investments.
Li attributed the problem to the fact that most entrepreneurs are reluctant to sell once they have established solid ground. His firm is therefore limited in choice because it is hard to convince stable startups to sell. Li has been lucky enough to secure successful investments in the past. A good example is an on-demand laundry app called Edaixi or Nuomi Holdings Inc. which provides online services such as booking movie tickets or restaurant booking.
It is hard to repeat that kind of success, but that does not mean that Li and his team are not willing to try. The company has selected Tony Yip, a banker from Goldman Sachs Group Inc (NYSE:GS) to take over the management and accounting team. Li puts a lot of emphasis on synergy. Making commercial partnerships is part of the first goal before embarking on an investment.
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