A very interesting read in last week's BusinessWeek cover issue story on Baidu (BIDU). (click here for full story) It all started with $1.2 seed money from U.S. venture capitalists. Rather than copying Google, the original model was to copy Inktomi which long time stock investors will remember from the late 90s NASDAQ bubble - i.e. rather than host an independent site, Baidu's original plan was to provide search content to other portals. When that started to become too expensive for said portals (ironically due to the success of the search engine), Baidu was 'forced' to go out on its own. At that time, due to the change in business model one of the seed investors called Yahoo's CEO (Jerry Yang) and offered to sell Baidu to Yahoo for $40 MILLION. (Oh Yahoo! what an error)
Then later in its life (in 2004), during its 3rd round of financing and pre ipo Google contributed $5M of a $15M round of financing. About a year later Baidu filed to go public and then the offers came in hot and heavy... including Google at $1.6 Billion. This story purports that Baidu would have sold out for $2 Billion...
Upon IPO the stock rose on the first day from $27 to $122, creating a value of $4 Billion.
The rest is history. Half a decade later we see Baidu at $38 Billion market cap. Baidu's founder now worth $7.2 Billion (age 41) after struggling in the U.S. as a $45K programmer at Infoseek.
(I realize to HAL9000 all this data means nothing as it does not contribute one iota to making mad money trading BIDU in 1/3000th of a second increments - but to some of us humanoids, company history still can be fascinating)
Long Baidu in fund; no personal position
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