Baidu has opened up over a dozen of their current projects to direct investment, hoping to boost development as they attempt to stay competitive in China’s O2O arena. The companies open for investment include recent spinoffs 91 Desktop and Baidu Takeaway, a food delivery service.
Baidu saw a sharp drop in their stock at the start of this week following their Q2 earnings report. Revenue fell below expectations due to the company’s aggressive O2O investment.
“Because of the early-stage nature, we have to invest aggressively to make sure we will be successful,” said CFO Xinzhe Li during an earnings call.
Li noted that strong competition from non-public companies including Meituan and Dianping meant that Baidu had no choice but to invest aggressively over the next three to five years.
The latest program from Baidu, dubbed the “aircraft carrier program,” will open series of Baidu assets up to investment with the goal of developing out their ecosystem under the guidance of Baidu.
Baidu takeaway [Baidu Waimai] is a an O2O service with logistics operations covering predominantly food. They hope to extend their coverage to pharmacies, flowers, supermarkets and other consumer products. They are also the testing company for Baidu delivery drones, with the latest trial taking place in June. 91 Desktop [91 Zhuozi] is a desktop theme app.
Baidu recently invested 20 billion RMB ($3.2 billion USD) in Nuomi, one of the largest O2O services in the country and a fully-owned Baidu entity.