Baidu Seeks Diversification in Tudou Talks 百度求购土豆，寻求多元化

By newsdoug on August 11, 2011

Finally there’s a bit of news out ther about online search leader Baidu (Nasdaq: BIDU) that I like, with Chinese media reporting the company is in talks to buy Tudou, one of China’s top online video sites. (English article; Chinese article) Regular readers of this blog will know that I consider Baidu a classic one-note samba, relying on search-related advertising for almost 100 percent of its revenue despite numerous failed attempts to diversify into other businesses. (previous post) But in this case, a purchase of Tudou, a relatively successful company in the online video sharing space, would make great sense for both companies and could ultimately help Baidu achieve its evasive goal of deriving profits from something besides search. Tudou is clearly in dire need of cash, based on its determination to go forward with a delayed IPO despite facing the worst market for such offerings since ... in Tudou the financial crisis of 2008. (previous post) So from Baidu’s perspective, it could probably take advantage of Tudou’s need for cash and turbulence on Wall Street to buy the company for a very good price. From Tudou’s perspective, Baidu would be an extremely strong partner in two ways. Most importantly, Baidu could tinker with its search results, which it already frequently does, to favor Tudou over other video sharing sites like industry leader Youku (NYSE: YOKU). In addition, Baidu could also use its industry clout to help Tudou sign favorable licensing deals for legal video, as Beijing pressures China’s Web firms to offer more legitimate content instead of the pirated material they have thrived on for years. Youku made a step in that direction when it signed a deal in June with Warner Brothers (NYSE: TWX) (previous post), and Baidu itself signed a similar tie-up with major music labels last month. (previous post) If Baidu does reach a deal for Tudou, it will have a bit of work to do, as the company posted a loss of $12 million in the second quarter, triple the $4 million loss for Youku. Baidu Chairman Robin Li could also find it challenging to work with Tudou founder Gary Wang, whose messy divorce held up his company’s IPO which was originally slated for late last year. But Wang’s weak financial position may leave him with little choice than to sell out, with Baidu offering one of the best potential partners.

Bottom line: Baidu could achieve its elusive goal of diversifying beyond its core online search business with a potential purchase of online video sharing site Tudou.

百度(BIDU.O)终于有条合我口味的新闻了。据中国媒体报导，百度正在洽谈收购土豆网。经常浏览我博客的读者们知道，我一直认为百度是只有一个舞步的桑巴，近乎100%的收入依赖于搜索相关的广告，虽然有一些尝试业务多元化的动作，但多是无果而终。但就此案例而言，土豆网是一个运作相对成功的网上视频分享网站，购买它对两家公司都有很大意义，而且最终有可能帮助百度增加营收渠道。土豆如此糟糕时机下仍坚持IPO，明显是急需资金。所以，从百度的角度出发，充分利用土豆的资金需求以及华尔街的震荡，它也许可以用很好的价格买下土豆。再从土豆的角度来看，百度是一个非常强有力的合作夥伴。最重要的是，百度可以对页面搜索结果稍作调整，使土豆的内容相比优酷等竞争对手显示在搜索结果更有利的位置。另外，百度还可利用其行业影响力，帮助土豆签下有利的合法视频许可协议。目前政府正施压中国网络企业提供合法内容，弃用盗版内容。优酷网(YOKU.N)在这一方向上已经迈出了一步，6月份公司与华纳兄弟(TWX.N)签署合作协议。而百度上月也宣布与多家唱片公司联手合作。如果百度确实为土豆达成了类似协议，那麽土豆可能有一些功课要做，因为公司第二季度报告亏损1,200万美元，是优酷的三倍。此外，百度董事长李彦宏也可能会感到与土豆创始人王微共事有些麻烦。要知道土豆网IPO原本定在去年底，正是因为王微复杂的离婚纠纷拖延了IPO时间。但是鉴于土豆网目前财务状况，王微除了出售公司外选择寥寥，而百度正好是最好的潜在合作夥伴之一。

一句话：百度如果收购土豆，可能从单一搜索业务模式逐渐走向多元化。

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