Search leader Baidu (Nasdaq: BIDU) seems to be all over the headlines this past week, as it looks desperately for new areas that can contribute to its top and bottom-line growth for the day when its search business starts to slow, which may be sooner than many people think. In the biggest piece of news, Baidu has announced a $300 million investment in online travel site Qunar. (company announcement; English article) Honestly speaking, this investment doesn’t look too exciting, as the online travel services space is already dominated by well-established players Ctrip (Nasdaq: CTRP) and eLong (Nasdaq: LONG), as well as a number of smaller players with backing from big state-run travel firms. A quick view of the site is also quite underwhelming, as it doesn’t appear to offer anything that the others don’t already have and, accordingly, I wouldn’t expect to see too much return from this investment. Two other tie-ups that have made recent headlines will see Baiidu forming a strategic partnership with leading real estate service firm China Real Estate Investment Corp (Nasdaq: CRIC) (English article); and buying a 29 percent stake in online ratings service Lefbrain Technology. (English article) These two deals look slightly more interesting in that they are focused around Baidu’s core strength of organizing and providing Web-based information. If it plays these initiatives right, perhaps one might contribute to its future business. But the much larger travel investment looks suspiciously like some of its previous attempts outside its core area, such as forays into micro blogging and online retail that both ended up as duds that were later shut down.
Bottom line: Baidu’s new travel services foray looks like another dud investment outside its core search business, while recent real estate and ratings tie-ups could stand some chance of success.
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