INTERNET: Baidu, Tencent Dumping Wanda in E-Commerce?

Bottom line: Reports that Tencent and Baidu have withdrawn from Wanda’s O2O e-commerce venture are probably true, and the service may be quietly retired over the next 12 month due to lack of progress.

Baidu, Tencent dump Wanda’s 

Real estate giant Wanda Group may be zipping ahead with its diversification drive into entertainment, but its lower profile move into Internet services doesn’t seem to be gaining nearly as much traction. That’s my latest assessment, following new reports saying Internet giants Baidu (Nasdaq: BIDU) and Tencent (HKEx: 700) have quietly pulled out of Wanda’s high-profile foray into e-commerce announced more than a year ago. The reports are based on market talk citing some business filings that indirectly hint at such a withdrawal, which wouldn’t be too surprising. Read Full Post…

INTERNET: Baidu Adds Foreign Flavor in New E-Commerce Drive

Bottom line: Baidu’s new upscale online shopping mall looks more focused and well designed than its earlier e-commerce initiatives, but could have a difficult time finding an audience due to stiff competition.

Baidu tries e-commerce again with upscale mall

Online search leader Baidu (Nasdaq: BIDU) is hoping the third time is the charm for its drive into e-commerce, with the formal launch of its new online mall with a distinctly foreign flavor targeting high-end shoppers. I’ve followed Baidu for a long time now, and the company certainly has a poor track record in e-commerce and more broadly for homegrown initiatives like this latest one called Baidu Mall.

But that said, the company has found more success recently by buying assets outside its core online search area, and then giving them access to its own vast cash and other resources to help them quickly gain market share. Perhaps it’s hoping to use that strategy as well for the newly launched Baidu Mall, even though the platform itself seems to be Baidu’s own creation rather than an acquisition. Read Full Post…

FUND RAISING: Alibaba Builds a Home, Baidu Funds E-Commerce

Bottom line: New $200-$300 million investments by Baidu and Alibaba in smaller Internet companies show such fundings are starting to recede in size after peaking earlier this year.

58 Home gets investment from Alibaba, KKR

Two big fund-raising stories are in the headlines today, each involving a top Internet company as China’s “big 3” trio of Baidu (Nasdaq: BIDU), Alibaba (NYSE: BABA) and Tencent (HKEx: 700) look for ways to put their big cash pots to work. It’s interesting to note that neither Baidu nor Alibaba is the central player in either of these latest deals, one in e-commerce and the other in online-to-offline (O2O) services. Instead, both are playing secondary roles, supporting other companies with good growth potential.

The larger of the 2 investments is seeing Alibaba participate in a new $300 million first funding round for a 1-year-old company that helps web surfers find home-based services like cleaning and baby sitting. The second has Baidu participating in a $200 million funding for an older e-commerce company with close ties to state-run cereals giant COFCO. Read Full Post…

Baidu Tries E-Commerce Search 百度购物上线 再入电商门槛

After several misguided e-commerce initiatives that ended in failure, Internet giant Baidu (Nasdaq: BIDU) is finally making what looks like a smart move in the highly competitive space by focusing on what it does best: providing search services. In this case, media are reporting that China’s dominant provider online search company has quietly launched an e-commerce search engine, in what looks like a direct challenge to e-commerce leader Alibaba’s own eTao e-commerce search site.

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Baidu Diversification Sputters With E-Commerce Flop 乐酷天将关停 百度电商战略再折戟

Internet giant Tencent (HKEx: 700) might want to take a look at online search leader Baidu (Nasdaq: BIDU), as the former defends itself in a lawsuit accusing it of using its hugely popular QQ instant messaging platform to dominate other areas of the Internet. Just days after the opening of a trial in a Guangdong court accusing Tencent of abusing its QQ monopoly status, word has emerged that Baidu will close its latest e-commerce site, called Lekutian, less than 2 years after launching the service with Japanese e-commerce leader Rakuten (Tokyo: 4755). For anyone who has failed to miss the connection, my point is this: having monopoly status in one area of the Internet doesn’t necessarily guarantee success in other areas — a reality that Baidu illustrates after numerous failed initiatives outside its core search business. Let’s take a look at the facts first. Rakuten has said it will shutter Lekutian due to stiff competition in China’s overcrowded e-commerce space (English article), and a visit to the site reveals the closure will come this Friday. Confirmation of the closure comes after rumors had swirled for the last month over the future of the site, which Baidu and Rakuten launched with fanfare in 2010 just as more established e-commerce players like 360Buy and Dangdang (NYSE: DANG) were starting to raise hundreds of millions of dollars in new funds for aggressive expansions. Just 2 weeks ago, domestic media reported that Lekutian was making large layoffs and preparing for a major directional shift that would see it focus on its Japanese roots to offer more Japanese products. (previous post) The company denied the layoff reports though it did openly talk about the shift to a more Japanese flavor. Clearly Rakuten was having second thoughts about the shift even then, and has decided to shutter the business altogether, in what looks like a wise move to me that will inevitably see Baidu take yet another charge, probably in the tens of millions of dollars, when it announces its second quarter results in July. I say “another” charge, as this failure is hardly new for Baidu, which has yet to find success outside its core search business despite numerous attempts. Its first major e-commerce initiative, a service called You’a, never gained any traction and was later quietly folded into other services after the Lekutian venture was announced. Last year Baidu also quietly shuttered its Twitter-like microblogging service, which again failed to compete with rivals, including Sina’s (Nasdaq: SINA) wildly popular Weibo. (previous post) Baidu’s main overseas investment, a Japanese search site, has also been largely a flop, failing to gain much traction in that competitive market. All of these flops for a company with near-monopoly status in China’s lucrative online search market are all the more interesting in light of the Tencent trial, which began last week as the result of a lawsuit filed by Internet security software specialist Qihoo 360. (previous post) Qihoo alleged that Tencent used QQ’s near monopoly status in instant messaging to dominate other areas, such as the online game space. I would tend to agree with Qihoo’s argument that companies that dominate one space like Tencent do have an unfair advantage when developing related spaces, and should be legally restricted from using that advantage to stifle competition. At the same time, Baidu, which controls more than 70 percent of the online search market, the legal definition of a monopoly, certainly shows that just having domination in one area doesn’t guarantee success in others. I attribute Baidu’s lack of ability to parlay its search dominance into other areas to a general inability to execute new business plans, even though it clearly has many advantages over its rivals. At the end of the day, its inability to develop new businesses does work to Baidu’s advantage in one sense, since Qihoo and any other rivals will never accuse it of using its near monopoly status in search to unfairly dominate other areas of the Internet. But at the same time, its repeated failures to diversify also leave Baidu highly vulnerable to lawsuits from the anti-monopoly regulator itself, which has voiced dissatisfaction in the past and could easily take legal action to bring more competition to China’s online search market this year or next.

Bottom line: Baidu’s latest e-commerce failure reflects an inability to parlay its online search dominance into new areas, as it remains open to anti-trust action due to its monopoly in search.

Related postings 相关文章:

Tencent in Monopoly Spotlight; Baidu Next? 腾讯被诉垄断 下一个是百度吗?

Baidu’s Strong Growth Underwhelms 百度业绩持续强劲增长将投资者期望抬升过高

Baidu Dreams of Brazil 百度试水巴西

INTERNET: Baidu Removes Millions of Ads, Shutters Travel Site

Bottom line: Baidu’s massive ad cleanup in May and shuttering of a site for travelers reflects ongoing pressure on its core ad-dependent search business while spotlighting its inability to branch into non-search areas.

Baidu search cleanup continues

Search giant Baidu (Nasdaq: BIDU) is in a couple of headlines as we head into the latter part of the week, reflecting two major challenges the company is facing. The larger headline says the company has just removed millions of ads, a whopping 237 million to be precise, for reasons including being misleading and promoting unhealthy topics like porn. The second has the company shuttering a relatively minor travel site, which made me laugh just slightly, since I wasn’t even aware the company had such a site.

The first story is certainly the most important, since Baidu still derives the vast majority of its money from ad sales related to its core search business. By comparison, the second story demonstrates once again Baidu’s inability to diversify into areas besides search. This particular travel investment, while probably quite small, follows a long stream of similar, and often much larger, investments into other areas like takeout dining, and e-commerce, just to name a few. Read Full Post…

INTERNET: Loss Shakes Baidu to the Core

Bottom line: Baidu’s first-ever loss since going public reflects a long-anticipated decline for its core search business, which could mark the start of a longer-term decline due to lack of a strong new business lines.

Baidu in search of search replacement

It seems that profits are increasingly hard to come by these days on China’s Internet. That’s the major takeaway coming in the latest results from search giant Baidu (Nasdaq: BIDU), which has just posted its first loss since becoming a publicly listed company 14 years ago. Perhaps most worrisome, the biggest issue appears to lie in Baidu’s core search business, always a cash cow in the past, whose operating profits tumbled in the first three months of the year.

The surprise loss is one of the first-ever that I can recall for China’s three largest Internet companies or the BAT, namely Baidu, Alibaba (NYSE: BABA) and Tencent (HKEx: 700). That’s led many to wonder whether Baidu’s glory days are fast fading into the rear-view mirror, or whether perhaps this company has another trick pony beyond its search business that has sustained it for years. Read Full Post…

INTERNET: Baidu Sambas Out of Brazil

Bottom line: Baidu’s withdrawal from Brazil reflects a broader inability of Chinese companies to succeed overseas due to their different practices and local wariness about their ability to protect user privacy.

Baidu says bye-bye to Brazil

In what is probably coming as a surprise to no one, media reports are saying that search leader Baidu (Nasdaq: BIDU) is pulling out of Brazil. This would represent the company’s latest failure abroad, and is really part of a broader string of failures not only for the company but China’s internet sector in general. This particular group is quite good at milking the China market for all it’s worth, but then being unable to replicate its success in other markets.

There are lots of reasons for the inability of China’s Internet companies to succeed outside their home market. One is simply inexperience. But another is really the direct result of Beijing’s determination to set up what almost amounts to a parallel Internet in China that in some ways is identical to the global Internet but in others is very different. Read Full Post…

INTERNET: Baidu Rejigs Maps in Face of Competition

Bottom line: Baidu’s reorganization of its mapping unit reflects growing competition in the space, and could ultimately end in a shuttering of the service if its usage continues to decline. 

Baidu mapping service charts new direction

The wheels of restlessness at online search leader Baidu (Nasdaq: BIDU) are grinding into motion once more, with word that the company has made a major shift in its popular mapping division. Company watchers will know the restlessness to which I refer is a direct reference to Baidu’s founder Robin Li, who is famous for getting into new businesses, only to tire of and ultimately jettison them after just a few years.

In this case it’s probably far too early to say if that’s the case for Baidu’s mapping unit, which has been one of its most popular products for quite some time, thanks in no small part to its dominance in online search. The problem is that Baidu has failed to keep pace with more nimble competition, most notably from the Alibaba-owned (NYSE: BABA) AutoNavi. What’s more, an equally large potential rival is looming in the form of global giant Google (Nasdaq: GOOG), which has recently begun updating its previously dormant China mapping service. Read Full Post…

E-COMMERCE: Alibaba Salivates at in ‘New Retail’ Vision

Bottom line: Alibaba’s potential purchase of could be the biggest piece yet in its pursuit of a “new retail” model, but could result in a case of indigestion as it tries to make the company profitable.

Alibaba salivates at

When it comes to acquisitions, e-commerce giant Alibaba (NYSE: BABA) seems to have an insatiable appetite these days. After investing some 80 billion yuan ($12.7 billion) in brick-and-mortar retailing over the last couple of years, the company is now setting its eyes on take-out dining specialist, in a deal that could cost it around another $5 billion.

This particular buying binge does seem a bit more focused than Alibaba’s previous M&A patterns, which always felt a bit more random to me and covered a wide range of areas. In this instance, the company is pursuing founder Jack Ma’s vision of a “new retail” landscape that will combine Alibaba’s mastery of e-commerce with more traditional brick-and-mortar retailing. Read Full Post…

INTERNET: Toutiao Sues Baidu Over Search Abuse

Bottom line: Baidu’s anti-competitive behavior alleged in a lawsuit by Jinri Toutiao won’t have a long-term effect on its stock, but will draw the attention of an increasingly assertive anti-trust regulator.

Toutiao sues Baidu for manipulating search results

A humorous war of words has broken out between search leader Baidu (Nasdaq: BIDU) and news aggregating app Jinri Toutiao, also sometimes called Today’s Headlines, over unfair competition in the form of search manipulation. I’ll detail the allegations shortly. But on a more serious note, this particular lawsuit does raise the question of whether a search engine like Baidu is obliged to be objective in its results. Moreover, it could also open the company to allegations of abusing its market-leading position with anti-competitive actions.

This kind of monopoly-like position has become a growing issue on China’s Internet, which has recently shed the notion of being too small for antitrust treatment. The original BAT of Baidu, Alibaba (NYSE: BABA) and Tencent (HKEx: 700) all now hold positions in search, e-commerce and games, respectively, that are quite lucrative and might be considered monopolies in many other markets. I personally would consider all three monopolies in China in terms of their ability to dominate their respective markets, and I suspect the regulator may someday attempt to challenge them the way that Google (Nasdaq: GOOG) and Facebook (Nasdaq: FB) are now getting challenged in the rest of the world.  Read Full Post…