Chinese web services company, Baidu, has partnered with two biggest online travel companies in the country to become the leading player in the race for China’s travelers. There are reports that the search engine giant has already lapped its Chinese rivals, including Alibaba.
Earlier, Baidu sold stake in Qunar to rival Ctrip. Now, the search engine giant will have 25% stake in the country’s biggest travel site Ctrip, which will take about 48% stake Qunar. Experts believed that the deal will be beneficial for both the companies that were previously fighting for price war.
The below 50% ownership will also allow Ctrip to get protection against scrutiny from Chinese antitrust authorities. Earlier, the company acquired more than one third stakes in its rival, eLong.
After the new deal, Ctrip will start cooperating closely with the search engine giant, which could help in generating traffic for Ctrip. Chi Tsang, analyst at HSBC, said, “The pact also spells relief for Baidu investors, who have recently fretted about shrinking margins. Divesting most of its stake in loss-making Qunar will boost Baidu’s margins by six to seven percentage points”.
Full content: The Wall Street Journal
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