China's Baidu buys majority stake in group buying site Nuomi

The company wants to use Nuomi to bolster its mapping products

Chinese search giant Baidu plans to spend US$160 million to buy a majority stake in a leading group buying site in the country, part of a string of recent deals the company had made to bolster its Internet business.

On Friday, Baidu said it will take a 59 percent stake in Nuomi, a subsidiary of Renren, which is best known for operating China's version of Facebook. The deal will close in the fourth quarter.

Baidu said Nuomi's group buying business would both "complement" and help drive growth in the search giant's existing mobile mapping and location-based services. Nuomi ranks as one of China's top group buying sites, and has 3.8 million active paying users. About 30 percent of its sales are made through mobile devices.

Baidu has long reigned as the country's largest search engine, but its business is increasingly focused on the mobile Internet space at a time when China has become the world's largest market for smartphones. Along with search, Baidu has pointed to its online mapping services as an area it would like to expand in.

The search giant announced the Nuomi deal after deciding to buy two leading app stores in the country, by spending $1.9 billion to acquire 91 Wireless Websoft, a subsidiary of a gaming developer in the country. On Thursday, the company revealed the acquisition was made to help support Baidu's new app distribution model to bring more third-party Web apps to its mobile services.

In May, the company also announced another acquisition to buy an online video business in the country for $370 million. The deal has made Baidu's own video platform, known as iQiyi, one of China's largest.

In the first quarter, Nuomi grabbed a 5.9 share of China's group buying market, making it the fifth largest site of its kind during the period, according to Dataotuan, a group buying aggregator in the country. Nuomi, however, is just one of several leading group buying sites in the country. The largest is Juhuasuan, which had a 33.6 percent market share and is also owned by e-commerce giant Alibaba Group.

Baidu has in the past struggled in China's e-commerce space, where it has faced strong competition from the likes of Alibaba. But the company is increasingly spending more on research and development, as well as marketing, to buttress its mobile Internet business.

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Michael Kan

IDG News Service
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