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Baidu ( BIDU ) will reportedly spin off its professional Baidu Video service, as the China Internet search leader looks to pare is newer, money-losing businesses from its core search operation. Baidu Video would receive RMB 1 billion ($154.3 million) in new investment as it takes on two more partners, according to a report Thursday from Young’s China Business blog . Rumors about changes at Baidu Video come soon after reports of a major corporate reorganization at Baidu that aims to separate its older, profitable search services from its newer businesses, many of which are losing money. This is similar to what Google did in creating Alphabet ( GOOGL ) as the parent company for all its operations. 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 ( AZSEY ) and Hillhouse Capital. To continue its growth, Baidu should follow in Google’s footsteps “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. Baidu Could Be Eyeing Big Structural Changes Young’s China Business said the Baidu Video unit is separate from Baidu’s iQiyi.com, the online video service that is similar to Google’s YouTube. Baidu announced in February that it would sell money-losing iQiyi to an outside group led by Baidu CEO Robin Li. IQiyi is looking to become a bigger force in the country’s video-streaming and movie-making fields, a nearly $6 billion market that also includes Baidu rivals Alibaba Group ( BABA ), Sohu.com ( SOHU ) and Tencent Holdings ( TCEHY ). Last year, Netflix ( NFLX ) said it wants to begin operating in China, but the streaming media company has expressed uncertainty about its planned move into the country by 2016. 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’s WeChat mobile messaging platform. According to Marbridge , the spinoff will see New Culture Media Group and venture capital firm SAIF each invest about RMB 500 million ($77.1 million) in Baidu Video. Each of the new partners would receive about 20% of Baidu Video, Marbridge said. Baidu stock has nearly doubled since skidding to a three-year low of 100 in early February. Baidu stock broke out of a cup-with-handle base in late March, at a 189.90 buy point. Shares were flat in midday trading in the stock market today , near 194. Baidu will report Q1 earnings on April 28 and has given revenue guidance below analyst expectations, as the company invests heavily in its “O2O” (online-to-offline) strategy to draw Web shoppers to in-person services and physical stores. Baidu recently said it is 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 the Bloomberg report. Image provided by Shutterstock . Scalper1 News
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