Baidu Buys Major Stake In Uber

by Cameron Aubernon

Published: December 19th, 2014

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.

#Apps #Baidu #China #Integration #StakePurchases #TransportationNetworkCompanies #Uber

Cameron Aubernon

Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.

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11 comments

RHD on Dec 19, 2014

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

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- Corey Lewis on Dec 19, 2014
  
  They baidu the time until they can baidu company. And go around beelding warr.
  
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- Ect on Dec 20, 2014
  
  Coffee? Or something stronger?
  
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- Tekdemon on Dec 20, 2014
  
  Why is it that whenever a Chinese company buys something people feel compelled to make stupid jokes about it's name? Like American companies have such great sounding names in other languages or something.
  
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- Stuki on Dec 21, 2014
  
  @tekdemon "Uber". Or Yahoo......
  
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Jrhmobile on Dec 19, 2014

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.

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- Xeranar on Dec 19, 2014
  
  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.
  
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- Ect on Dec 20, 2014
  
  @Xeranar 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.
  
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- Tekdemon on Dec 20, 2014
  
  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.
  
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Jnik on Dec 19, 2014

Oh. I thought you meant Erica!

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HotPotato on Dec 20, 2014

Oh, Baidu way...

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