China Syndrome
5 year old Beijing based search engine Baidu Com Inc (BIDU:NASDAQ) launched their Initial Placing Offer (IPO) on Friday (5/8/05), last year they earned US $1.4 . The initial offering was 4.04 MN shares , priced at $27, they opened at $66 and ended their first day at $122 having traded as high as $151.12 and are said to have been 40 times oversubscribed. In Chinese, Baidu means "a hundred times". Baidu takes its name from a 12th-century Song dynasty poem about searching for a beautiful woman amidst the teeming masses.
Baidu's IPO prospectus states that Goldman Sachs (Asia) LLC, Credit Suisse First Boston and Piper Jaffray are the company's underwriters.
That means, the company could have raised $488 million, rather than the $108 million they raised. It also puts a valuation on the whole company of US$5 Billion.(ish) With average daily volume of 22.7 million shares there was a lot of flipping – Internet fever is back ? On Tuesday they ended down at US$99 (18%) on a volume of nearly 9 Mn shares….Google own 2.6%.
The company has some interesting non-Chinese Directors...Scott Walchek, who was President, CEO and Co-Founder of C2B Technologies, a revolutionary e-commerce infrastructure company that provided a web-based, private-labeled, comparative shopping engine to top tier Internet portals. C2B was ultimately acquired by Internet infrastructure giant, Inktomi Corporation in August of 1998 for US$88Mn. . Prior to C2B, Scott was a pioneer in interactive media technologies and content. He was part of the founding team at Macromedia, Inc. where he headed up its product marketing, business development, and market development efforts from 1989-1993. SCott left Macromedia to become CEO and President of Sanctuary Woods, Inc. where he successfully built this small, publicly traded company into one of the fasted growing developers and publishers of entertainment and education interactive content over 2.5 years. Prior experience includes technical marketing positions as Director of Product Marketing and Product Line Management at Sun Microsystems and Migent, Inc.
Greg B. Penner, previously a Senior Vice President and CFO of Wal-Mart Japan and a now a general partner of Madrone Capital Partners, an investment firm based in Menlo Park, California is a Director.
Asad Jamal is another and represents, Draper Fisher Jurvetson ePlanet Ventures (DFJ ePlanet), founded by Asad Jamal, in partnership with Draper Fisher Jurvetson, which is a premier, global venture capital firm that operates offices in Redwood City, California; Singapore, Bejjing, and Shanghai, China; Hong Kong; London; and Tokyo; and is in the process of opening an office in Mumbai. Previously, Mr. Jamal has worked as a Managing Director for Peregrine Investments, the Hong Kong based Asia-Pacific investment bank, and as Head of Derivatives Trading for the Chase Manhattan Bank in London. Mr. Jamal graduated with a B.Sc. (Honors) in Economics & Finance from the London School of Economics, and is a member of The Institute of Chartered Accountants in England & Wales having qualified with Arthur Andersen Co., London.
In Hong Kong, Chen Pei, president of HC International's (8292: HK) search subsidiary Zhongsou, said the company's main short-term competition is Baidu but Microsoft is Zhongsou's long-term competition. According to Chen, Zhongsou targets the high-end search market and has made a big investment in the development of its search technology due to be re-launched within 2 months.
Yahoo meanwhile are taking a 35% stake in Chinese business to business website Alibaba and in return gain control of Yahoo China's core businesses. No cash is involved and Alibaba CEO Jack Ma might be appointed Yahoo China president, Softbank, one of Alibaba's investors, is also involved. Yahoo's China businesses currently include the Chinese Internet portal, the search engine Yisou, online auction website 1pai (a joint venture with Sina (Nasdaq: SINA)) and instant messaging service Yahoo Messenger.
This re-creates the limited program of re-selling Google has partnered with BellSouth, it looks as if only sizeable agencies and other types of large partners would qualify for reseller status.
This could be a significant development. The 20 years of high tech history shows the importance of a strong and respectful alliance, with resellers around the globe, to provide stability and long life for the likes of Microsoft.
Google has just joined several news engines ,Topix.net, Findory, Yahoo News, RocketNews, and is now officially making Google news results available as RSS or ATOM feeds. Alerts will still be available – better set one up on “China search engines”…er...quickly.
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