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Is Baidu About To Pull A Google And Split Off Its Search Core, Too?

Just as Google reorganized under new parent firm Alphabet ( GOOGL ), Chinese search leader Baidu ( BIDU ) is planning to break off its search operations into a separate company, according to a report Thursday. Baidu plans several changes to its business structure, including establishment of a subsidiary that will house its online search services, said Marbridge Consulting, citing a release via Baidu’s official account on Tencent Holdings ‘ ( TCEHY ) WeChat mobile messaging platform. Baidu will establish “Baidu Search Company,” an entity comprised of the Search Services Group, the Mobile Services Group and the Nuomi.com team, the report said. Baidu acquired group-buying website Nuomi.com in 2014 as part of its online-to-offline, or O2O, strategy. Xiang Hailong, Baidu senior vice president and Search Services Group general manager, will head the new company and report directly to Baidu CEO Robin Li, Marbridge Consulting said. “Following the restructuring, Li will focus more of his time and energies on Internet finance, driverless cars, artificial intelligence and similarly innovative areas of the business, along with related strategic priorities,” Marbridge said. Like Alphabet, Baidu is investing to develop self-driving cars and other technology not related to its core search operations. In November, Baidu announced it had submitted an application for a direct-banking license in partnership with China’s Citic Bank, and for an online insurance license in partnership with Allianz and Hillhouse Capital. To continue its growth, Baidu should follow in the footsteps of Alphabet-owned Google “and split its non-core businesses from its core search and ads business. If they do this, Baidu stock would likely receive a big boost, leaving them with the cash to make a foray into the U.S. market,” Taiwan-based Sephi Shapira, CEO of mobile advertising platform MassiveImpact, told IBD via email in February. The company’s revenue guidance for Q1 fell short of analyst expectations. Baidu stock was up more than 1% in midday trading in the stock market today , near 196, ts highest price since late December. Baidu stock has nearly doubled since August but is down 9% in the past 12 months. Shares broke out of a cup-with-handle base at 189.90 on March 29. Other leading China Internet stocks were little changed Thursday, with  Vipshop Holdings ( VIPS ), Alibaba Group ( BABA ) and NetEase ( NTES ) all down a fraction, and JD.com ( JD ) up a fraction. On Monday, Baidu confirmed that it’s seeking a $1 billion loan. A Baidu spokeswoman said the company aims to borrow the funds through a five-year syndicated facility for general corporate purposes, according to Bloomberg.

3D Printer Stocks Scream Higher As BofA Sees 3D Systems Revival

3D printer stocks 3D Systems ( DDD ) and Stratasys ( SSYS ) skyrocketed Thursday morning after Bank of America/Merrill Lynch goes from bear to bull on 3D. 3D Systems jumped 15.5% to 19.18 on the stock market today , a nine-month high. Stratasys rose 7.6% to 29.81, breaking out of a base going back to late October. Bank of America gave 3D Systems a “double upgrade,” raising it to a buy all the way from underperform. It hiked its price target from 11 to 26. Why the sudden switch from bear to bull? BofA sees new CEO Vyomesh Joshi fueling a turnaround. Joshi had worked for HP Inc. ( HPQ ), running HP’s printing business. BofA sees Joshi improving profit margins, which have declined. BofA raised 3D EPS targets for 2016 by 2 cents to 30 cents, 2017 EPS revised up by 18 cents to 57 cents and 2018 EPS revised up to 71 cents from 43 cents.  

China’s Alibaba Bucks Baidu, JD, Tencent In Acquisition, Investment

E-commerce giant Alibaba Group ( BABA ) is investing $1.9 billion in two deals confirmed in the past two days, holding firm to its strategy of growth through acquisition and boosting local services in China. On Wednesday, Alibaba said it will invest $900 million into Shanghai-based Ele.me, while an affiliate, Ant Financial, will kick in another $350 million. Ele.me is a leading online food-delivery company. As part of its global expansion, Alibaba announced Tuesday it will acquire a controlling stake in Singapore-based Lazada, a leading e-commerce platform in Southeast Asia, for an investment valued at $1 billion. The deals upped the ante in an ongoing war among China’s four largest Internet giants — Alibaba, JD.com ( JD ), Baidu ( BIDU ) and Tencent Holdings ( TCEHY ). Alibaba’s investment and acquisition strategy focuses on increasing user acquisition and engagement, improving customer experience and expanding products and services, a company spokesman said. In some cases it may begin with an initial minority investment and followed by business cooperation, he said. Related to its investment in Ele.me, Alibaba and Ant agreed last June to invest nearly $1 billion in Koubei.com, a joint venture initially targeting the market for ordering meals online in China, but which is now focused on local delivery services. Ele.me will assume Koubei’s online food delivery service, a fiercely competitive market that includes Baidu. Alibaba has invested aggressively to expand China’s fast-growing local services market, also known as online-to-offline, or O2O retailing, which brings brick-and-mortar retailers into the digital economy. O2O is expected to figure heavily in the future of retailing and consumption in China. It’s seen as a better way for Chinese consumers to research and buy goods and receive them quickly, with smartphones playing a key role. Alibaba’s Southeast Asia Play While growing its home market, the investment in Lazada expands Alibaba outside China. Lazada operates e-commerce platforms in Indonesia, Malaysia, the Philippines, Singapore Thailand and Vietnam. “Globalization is a critical strategy for the growth of Alibaba Group today and well into the future,” said Michael Evans, Alibaba’s president, in a statement announcing the deal. Of the four largest Internet companies in China, Alibaba has been investing the most money in growth. The No. 1 provider of e-commerce services in China, Alibaba last year invested  heavily in acquisitions. That included $4.63 billion for about a 20% stake in Suning, one of the largest consumer-electronics retail chains in China. The investment in Suning is part of a Alibaba’s O2O efforts. Tencent and Baidu have teamed with Dalian Wanda, one of China’s largest property and entertainment conglomerates, to create O2O platforms. JD greatly expanded one of its O2O operations last August when it invested $700 million in Yonghui Superstores, a supermarket chain with more than 350 stores. While expanding its dominance in e-commerce for both consumers and businesses, Alibaba is also engaged in financial services, cloud computing, Big Data analytics and Hollywood-style entertainment, in addition to O2O, ride hailing and food delivery services. Alibaba has reportedly invested about $400 million in Lyft, the U.S.-based ride sharing company that competes with Uber. Last week, Alibaba completed its acquisition of online video provider Youku Tudou for about $3.7 billion. Alibaba had already owned about a one-fifth stake. Speculation has also surfaced that Alibaba might boost its stake in Weibo ( WB ), the rising social media service similar to Twitter ( TWTR ). Weibo was spun off in 2014 by Shanghai-based Web portal Sina ( SINA ), which still owns the majority of Weibo’s stock. Alibaba has a 20% stake.