Baidu, China’s largest search engine, and an investor in Uber and Google, has continued its policy of corporate spinoff. Baidu Video went independent this week after the spin-off of the student app Zuoyebang. It has already raised a fresh capital of approximately $155 million. Shanghai New Media Culture funded more than $76 million, whereas the rest of the cash came from the venture capitalist SAIF Partners.
The new unit is an expansion of Baidu’s Xiaodu Interactive Entertainment and Technology. The unit is an affiliate and not a subsidiary. It operates separately from iQiYi, which is one of the large market players in the streaming sector in China. The move of spinning-off Baidu Video eases Baidu’s finances of capital intensive business and allows the company to act more like a startup.
According to sources, Baidu Video will focus mostly on movies and TV content that are professionally made. Hu Hao, one of the existing executives at Baidu will head the company as its Chief Executive Officer. The company will also launch a content fund worth $77 million. In an official release, a spokesperson said to a leading online publisher, “Baidu Video aims to become the number one professional generated content video platform in China. [Baidu Video] will focus on platform development and continue to provide our audiences with video search and content aggregation services.”
Apart from Baidu Video, Baidu also owns iQiyi, which is presently not making considerable profits. Founders of Baidu, Robin Li and Gong Yu, have submitted a proposal where they have proposed a plan of taking iQiyi private for $2.8 billion. This move comes six months after Baidu became a part of the newly formed Brazilian O2O Association, the first ever collaboration for developing O2O (online to offline) businesses in North America.