Baidu, China’s search behemoth, has announced that it is raising $1.5 billion in a two-part bond sale to write down debt and build up its war chest: Baidu remains the country’s biggest search portal but has of late been feeling the heat of competition from domestic rival Qihoo 360, an antivirus software company that launched its own search engine in August.
Kaiser Kuo, Baidu’s director of international communications, told TNW that Baidu will use some of the proceeds for acquisitions both in China and abroad, although it has “no specific M&A deals pending at present.”
One area where we may see more activity is in mobile. China is currently the world’s largest smartphone market and, like its Western counterpart Google, Baidu has been building up its mobile assets to meet and lead in that demand. Among those efforts have been a multi-million-dollar JV with Docomo, Baidu Yi Xin, and the development of its own forked Android OS for mobile devices, and producing own-branded devices as well. The company aims to have its new browser installed in 80% of smartphones sold in China by the end of this year.
It has also announced plans to invest US$1.6 billion in a new cloud-computing center.
But mobile has yet to offset declines in Baidu’s core business of search. Baidu’s shares have fallen 28% over the last three months, thanks in part to investor concern over competition by anti-virus software and browser company Qihoo 360, which launched its own search engine in August.
The public offering consists of US$750 million worth of 2.250% notes due 2017 and US$750 million of 3.500% notes due in 2022. The notes are expected to be listed on the Singapore Exchange.