Why did Baidu invest in Uber? Robin Li said it is the only phenomenal Internet company in the United States

The news that Baidu has made a strategic investment in Uber, a car rental software, was confirmed this afternoon (17th). However, Baidu declined to comment on the rumored $600 million investment. In Li Yanhong's view, Uber is the only phenomenal Internet company that has emerged in the United States in recent years. Unlike China, the traditional industries in the United States are very strong and efficient, and are also very strong competitors in the Internet industry. Therefore, in the United States, it is rare to see an Internet company that can truly have a revolutionary impact on traditional industries.

Obviously, Baidu does not want to miss out on the emerging taxi market. Just last week, news of Baidu's strategic investment in Uber finally came out (see Titanium Media's previous article "Baidu may announce investment in Uber on the 17th, the BAT taxi software market has finally gathered!"), and this news was confirmed this afternoon (the 17th). Now, the three giants of BAT have gathered in the taxi market. (See Titanium Media's year-end review of the commercial vehicle market "Review of the chaos in the commercial vehicle market in 2014: Crazy money burning, giants entering") However, Baidu did not comment on the rumor of a $600 million investment.

Baidu founder, chairman and CEO Robin Li said at the signing ceremony in the afternoon that he had seen a lot of reports about this event. However, unlike the media's main focus on the "investment" part, what really excited him was the "strategic cooperation".

"This may be the first time in history that Chinese and American Internet companies have such in-depth cooperation. This cooperation is not just an investment behavior."

Li Yanhong said that the real contact with Uber began this summer. At first, Travis, the founder and CEO of Uber, sent an email to Li Yanhong to express his intention to come to Beijing to learn about Baidu. Unfortunately, Li Yanhong was about to leave for the United States, so Li Yanhong went to San Francisco to visit Uber's headquarters. This trip deepened Li Yanhong's favor for Uber.

In Li Yanhong's view, Uber is the only phenomenal Internet company that has emerged in the United States in recent years. Unlike China, the traditional industries in the United States are very strong and efficient, and are also very strong competitors in the Internet industry. Therefore, in the United States, it is rare to see an Internet company that can truly have a revolutionary impact on traditional industries.

Also present at the signing ceremony was Uber founder and CEO Travis. He said,

"China is the fastest growing market outside the United States. As of now, Uber has launched services in nine cities including Beijing and Shanghai. The cooperation between the two companies will create a huge synergy effect. Many users will open Baidu Maps to plan their trips, and Uber car rental can provide users with good services."

Uber was founded in 2009 and is a taxi-hailing app born in Silicon Valley, USA. From November 2011 to August 2013, in less than two years, Uber's valuation increased from US$330 million to US$3.5 billion. When it raised US$1.2 billion in June this year, its valuation reached US$18.2 billion. In December, Uber's valuation reached US$40 billion in a new round of financing, a figure that shocked many people.

In China, Kuaidi Dache, invested by Alibaba, and Didi Dache, invested by Tencent, occupy the largest taxi market. In addition, these two apps have also launched luxury car services similar to Uber. At the same time, many taxi apps similar to Uber are also emerging.

However, excessive competition also affects service quality. From this perspective, the participation of a large company like Baidu with scale and resources in the competition will be conducive to improving services and reducing the prices of luxury cars.

Unlike traditional taxi apps, Uber often registers individual drivers as Uber drivers in the United States. This business model sometimes angers taxi drivers. This business model is sensitive in China because private cars carrying passengers will be considered "black cars" and are illegal. Therefore, the luxury cars launched by Kuaidi Dache and Didi Dache are all from licensed car rental companies to avoid government supervision.

In short, Uber's partnership with Baidu can not only help it accelerate its expansion in China through Baidu Maps, but also help it to better handle its relationship with the government. (This article was first published on Titanium Media)

The following is the transcript of Robin Li’s speech at the Baidu-Uber Strategic Cooperation and Investment Signing Ceremony:

Thank you to all the friends in the media for attending our press conference, and thank you to Travis for flying directly from the United States to participate in our event. After the invitation to this event was sent out, the media was very interested. I saw that there have been many reports about our cooperation. However, everyone's main focus is on the "investment" part, but what really excites me is "strategic cooperation". Why?

Because I think this may be the first time in history that Chinese Internet companies and American Internet companies have such in-depth cooperation. This cooperation is not just an investment behavior. We have actually seen a lot of investment behaviors before, whether it is from Baidu or other Chinese Internet companies investing in American Internet companies, or American Internet companies investing in Chinese Internet companies. This kind of simple investment behavior is already very common.

However, there has been almost no real deep strategic cooperation between Chinese and American Internet companies before. So I think this is a very meaningful event, which is why I am attending this press conference. I usually don’t attend any investment press conferences. For example, last year we acquired 91 Wireless for $1.9 billion, and we didn’t hold such a press conference, because investment itself is not a strategy, it serves the strategy. The real strategy is a mission and a goal that your company wants to achieve.

For Baidu, especially in the era of mobile Internet, what is our strategy? Our strategy is to "connect people and services". What services do people need? They are nothing more than those related to "food, clothing, housing and transportation". So it is easy for everyone to understand why we want to cooperate with Uber, because Uber represents the "transportation" in "food, clothing, housing and transportation".

This summer, I went to Silicon Valley and visited Uber. It was actually very interesting. When I was about to leave Beijing for Silicon Valley, I received an email from Travis, saying that he was coming to China and wanted to visit Baidu. I said: This time is not possible, I am going to the United States soon. So after they returned to the United States, I went to Uber's headquarters in San Francisco to take a look, which also gave me a first-hand feeling of what kind of company Uber is and what kind of founder Travis is. It was from that time that we began to discuss the strategic cooperation between Baidu and Uber. It was also at that time that I understood more why Uber is the only phenomenal company that has emerged in the US Internet industry in recent years.

In China, we have seen Internet companies transforming and even subverting various industries in traditional industries. Part of the reason is that China's traditional industries are relatively weak and inefficient. The history of the US market economy has been hundreds of years, and the traditional industries in the United States are also very strong and efficient. Their traditional industries are also competing with the Internet industry for market share. Therefore, in the United States, we rarely see an Internet company that can truly have a revolutionary impact on traditional industries, especially important traditional industries, but Uber is such a company that has already had a great impact.

For Baidu, we have our own ambition. We hope to develop well not only in China, but also in many countries and markets around the world; not only in traditional search, but also in connecting people and services. For Uber, they obviously cannot ignore a market like China, because China may be the most important market besides the US market.

Baidu has accumulated a lot of experience in technology and operations over the years in China, and we are willing to share it with Uber and other companies. We believe this will lead to a win-win situation. Baidu is an open platform, and we are willing to cooperate with companies like Uber to achieve win-win and multi-win situations.

So, this is our original intention for doing this. We also expect that the cooperation between Baidu and Uber will not only have a good start, but also have an increasingly successful direction and performance, and explore a path that more Chinese and American Internet companies can follow in the future.

Thank you everyone!

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.