Date: Jan 31, 2005
Copyright: Market Watch
By Carolyn Pritchard, MarketWatch
SAN FRANCISCO (MarketWatch) -- Baidu.com, China's largest Web
search engine, is preparing a New York listing that could raise
more than $200 million and provide an important test of international
appetite for Chinese Internet stocks, according to a report
published late Monday.
The company, which is backed by U.S. venture
capitalists and in which Google has a stake, is believed to
have appointed Credit Suisse First Boston and Goldman Sachs
to manage the initial public offering, likely to take place
on Nasdaq or the New York Stock Exchange, the Financial Times
reported on its Web site. The planned
sale of a stake of about 25 percent could value the company
at about $800 million and turn Robin Li, the chief executive
who co-founded the company in 1999 after working in Silicon
Valley, into a multi-millionaire, noted the FT.
The company and the two banks reportedly declined
to comment. People close to Baidu told the FT that the IPO
was slated for the second half of the year, but could be delayed
or scaled back depending on market conditions.
An IPO by Baidu, which controls nearly half
of China's Web search market, would present international
investors with a choice between the vast potential and huge
risks of the country's Internet sector, according to the FT.
With only 94 million of China's population of
1.3 billion using the Internet, according to official figures,
analysts are expecting Web penetration to boom over the next
few years, driven by rising wealth and technological advances,
the FT noted.
However, it is unclear whether Baidu will be
able to retain its hold on the market as Google's (GOOG: news,
chart, profile) Chinese search engine and three different
Yahoo (YHOO: news, chart, profile) search services have been
making inroads in China, according to the FT. Baidu, which
averages more than 30 million text searches per day, has said
that it recorded its first profit in 2003 and increased revenues
by some 150 per cent in each of 2002 and 2003, the FT reported.
The company does not disclose financial results,
but the FT cited Shanghai iResearch, a research firm, as estimating
the company's 2003 sales at Rmb100 million ($12.1 million).
Some 80 percent of the revenue comes from sponsored
links, in which clients pay to have their Web sites appear
alongside a search, the FT noted.
Google's purchase of an undisclosed stake in
the company last June, alongside other investors including
Venture TDF Group, was Baidu's third round of financing, according
to the FT.
It raised about $10 million from Draper Fisher
Jurvetson ePlanet Ventures, a California-based specialist
private equity group, in 2002, according to the FT.
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