Baidu Invests in Elevator-Ad Firm to Lift Its Offline Business
Baidu Inc. is leading a group that is investing 2.1 billion yuan ($302 million) in Xinchao Media Group, a company that places advertisements in elevators, as the internet search giant seeks to expand its offline-ad business.
Baidu made the announcement on Wednesday, but didn’t say how much the company itself will invest and didn’t name the other investors. The partnership will see Baidu use its big-data advantages to create “synergy” through which the two companies can share customers, Baidu said.
Founded in 2007, Chengdu-based Xinchao operates in more than 100 Chinese cities, including Beijing and Shanghai.
This is Baidu’s latest effort to expand its ads business — its main source of revenue — from online search to offline, despite its “all-in artificial intelligence” strategy, which includes a big bet on autonomous vehicles.
China’s largest search engine, which is still struggling to recover from a major health care ad scandal two years ago, has also seen its online ads business face increasing competition from challengers such as news-aggregator Toutiao and microblogging site Weibo.
In the first three quarters of 2018, Baidu bagged a total of 22.5 billion yuan for its online ads sales, an increase of 18% year-on-year, down from 25% last year.
The new funding round raises the total money raised by Xinchao to 6 billion yuan and gives it a valuation of over $2 billion. Company CEO Zhang Jixue has said it aims to have annual revenue of 4 billion to 5 billion yuan by the end of 2019, up from this year’s 1.5 billion yuan target.
This target puts Xinchao well behind sector leader Focus Media, which reported revenue of 3.8 billion yuan for the third quarter of this year alone. Xinchao said it has run ads in 700,000 elevators, compared with 2 million for the Shanghai-based Focus Media.
The Baidu-Xinchao tie-up follows a similar deal between Focus Media and Alibaba Group Holding Ltd. in July, when the e-commerce giant said it would pay $1.43 billion for a 6.62% share in Focus Media.
Contact reporter Mo Yelin (email@example.com)
Jan 27 14:25
Jan 27 14:09
Jan 27 13:57
Jan 24 06:56
Jan 24 06:01
Jan 24 02:16
Jan 23 18:30
Jan 23 16:00
Jan 23 10:48
Jan 23 05:58
Jan 23 03:49
Jan 23 03:41
Jan 23 03:09
Jan 22 15:44
Jan 22 06:31
- 1Wuhan Virus Latest: Wuhan Mayor Offers to Resign as Provincial Officials Are Punished
- 2Reporter’s Notebook: We Stayed in Wuhan as the Last Trains Pulled Out
- 3Wuhan Virus Update: Health Expert Warns of ‘Super-Spreader’ of Viral Pneumonia
- 4After Layoffs, Oracle Executive Vows to Stay in China
- 5Tencent Chairman Pony Ma Sells $260 Million of Shares
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas