Tuesday, June 23, 2009

Baidu on hunt for Acquisitions

Hoping to expand its already dominant position in the Chinese internet market, Baidu (NSDQ: BIDU) is on the hunt for an acquisition. CFO Jennifer Li tells Bloomberg News that the “Internet is at an early stage of its development. It’s dynamic, and we need to stay ahead.” Li didn’t provide many details, but Bloomberg points out that the company wants to expand its position in both e-commerce and mobile-Internet services. As it looks for companies to buy, Baidu could face competition in both categories from Alibaba Group, which has indicated it will spend at least $200 million on acquisitions over the next several years.

Baidu’s possible expansion comes as rival Google (NSDQ: GOOG) has run into trouble from Chinese authorities. Just last week, the government warned Google about the availability of pornography on its site and also told the company to stop linking to certain unspecified foreign websites, according to the WSJ. However, the WSJ reported Monday that those critiques may be inciting a backlash, noting that internet users are highlighting the likelihood that a university student who criticized the availability of pornography on Google on state television was an employee of state television.

Baidu has not been too active on the acquisition front in the past. In September, however, it did purchase a stake in Chinese online TV firm UiTV for $15 million.

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