By on December 19, 2014

Baidu_headquarters

Chinese Internet overlord Baidu is buying a major stake into everyone’s favorite transportation network company, Uber.

According to CNBC, neither company stated how much the stake cost Baidu, nor how large the stake is. The tech company joins Google and Goldman Sachs in the big-name-investor group backing the TNC, which is currently valued at $40 billion.

As for what will happen as a result of this pairing, Baidu wants to help Uber gain a foothold into the Chinese car-hailing app market — expected to jump to 45 million users next year, from 18 million in 2013 — which is dominated by Alibaba’s Kuaidi Dache and Tencent Holdings’ Didi Dache. Uber CEO Travis Kalanick said his company would integrate with the Baidu Maps app, in the hope of helping users get to where they need to go.

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11 Comments on “Baidu Buys Major Stake In Uber...”


  • avatar
    RHD

    There’s a “Buyed You!” joke in there somewhere. With just a little more coffee it will come to the surface.

  • avatar
    jrhmobile

    This idea of taking a small purchase and multiplying by a factor that equals 100% of the company, then calling it “market value” may make good copy, but it’s bogus.

    When somebody buys 100%, or sells 100%, of a company that states the company’s market value. Taking somebody’s 5% purchase and then multiplying it 20 times does not state a company’s market value. It only states the price for the purchased share of said company. And when you don’t know how much has been bought, at what price, reporting $40 Billion market value for Uber is bilious fiction.

    • 0 avatar
      Xeranar

      Actually…….Market Value would be whatever the market can bare. Technically you’re right that Baidu bought privately so it isn’t actually market value but since the market would take Baidu’s lead on the presumption of value it’s safe to assume that it is worth that. The difference is ‘valued’ isn’t actually market value, it’s an estimate of value. Which is where the difference you’re getting at comes in. Market Value is exactly that, if 1% of a company is worth a billion dollars that company is worth 100 billion (in theory).

      But the price of the tech frontier like Uber is worth more than it’s actual service because of the monopolization. If Uber & Lyft dominate the private black car market in most places you’re better off buying them now because they get too big to buy or challenge.

      • 0 avatar
        ect

        Whether a private or public sale, the notion of FMV is that it represents the price that a willing buyer and a willing seller, dealing at arm’s length, agree on.

        So, Baidu’s purchase is a FMV transaction. Whether it will prove to be a good investment or not is something only time will tell.

    • 0 avatar
      tekdemon

      How is that fiction…that’s exactly what a market value is-if someone is willing to buy 5% of your company at $1 billion then that means they are figuring that your company is worth $20 billion for the whole thing.

      And much of the time when a company does finally go public it ends up being worth a lot more. Daimler and Toyota took stakes in TSLA when it was valued at maybe 1/20th of what it is now and they both made out like bandits on the deal.

  • avatar
    jnik

    Oh. I thought you meant Erica!

  • avatar
    HotPotato

    Oh, Baidu way…

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