Baidu, China’s search behemoth, has announced that it is raising $1.5 billion in a two-part bond sale to write down debt and build up its war chest: Baidu remains the country’s biggest search portal but has of late been feeling the heat of competition from domestic rival Qihoo 360, an antivirus software company that launched its own search engine in August.
Kaiser Kuo, Baidu’s director of international communications, said that proceeds from the sale will be used for acquisitions both in China and abroad: “We want to be ready to invest opportunistically as good deals present themselves. We are not limiting ourselves to investments in the mobile sector, though mobile is certainly one of our priorities.”
China is currently the world’s largest smartphone market and, like its Western counterpart Google, Baidu has been building up its mobile assets to meet and lead that demand. Among those efforts have been a multi-million-dollar JV with Docomo, Baidu Yi Xin, as well as the development of its own forked Android OS for mobile devices, and producing own-branded devices. The company aims to have its new browser installed in 80 percent of Android smartphones sold in China by the end of this year.
It has also announced plans to invest US$1.6 billion in a new cloud-computing center.
But mobile has yet to offset declines in Baidu’s core business of search. Baidu’s shares have fallen 28 percent over the last three months, thanks in part to investor concern over competition by anti-virus software and browser company Qihoo 360, which launched its own search engine in August.
“While we believe that it may be a couple of years before we can really close the monetization gap with mobile, we are investing aggressively to position ourselves to capture mobile opportunities,” said Kuo, though he declined to discuss specific M&A targets.
The public offering consists of US$750 million worth of 2.250 percent notes due 2017 and US$750 million of 3.500 percent notes due in 2022. The notes are expected to be listed on the Singapore Exchange.
Baidu is the largest Chinese language search engines. Baidu’s mission is to provide the best way for people to find information online, including Chinese language web pages, news, images and multimedia files though links provided on their website. In addition to serving individual Internet search users, Baidu also provides a platform for businesses to reach potential customers online. The company’s online marketing services include auction-based P4P and tailored solutions. via: Baidu
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