Uber Gets Investment From Baidu--Update

By Gillian Wong 

Chinese Internet giant Baidu Inc. will invest in ride-hailing app Uber Technologies Inc., a person familiar with the matter said Friday, in a move that could help the U.S. startup's business in China.

Details of the investment amount weren't immediately known.

Baidu said it plans to announce an investment in a U.S. startup on Dec. 17, but didn't provide further details.

The Baidu investment will give the San Francisco-based company a strong partner in a market that it entered last year but hasn't gained much traction in due to stronger local competitors.

Baidu competes with Internet giant Alibaba Group Holding Ltd., which has an investment in taxi-hailing app Kuadi Dache. Tencent Holding Ltd. also has an investment in cab-booking app Didi Dache, which said Tuesday it raised more than $700 million in its latest funding round led by Singapore state investment firm Temasek Holdings Pte. Ltd.

Car-booking apps are just one part of China's quickly evolving Internet-services market, which is drawing competitors seeking to win over the country's 500 million smartphone-wielding consumers and the revenue they control.

For Baidu, the deal could allow China's dominant search engine to expand its mobile Internet offerings to attract more users. Baidu has a popular map application that could be able to offer users the ability to book Uber rides.

Earlier this month, Uber raised $1.2 billion in a new round of funding that valued the company at $41 billion.

But Uber has also had its share of difficulties as it seeks to expand. Allegations that an Uber driver raped a woman in India last weekend has triggered a nationwide ban on smartphone-enabled taxi services in India that could stifle the company's ability to operate in its largest market outside of the U.S.

Also this week, Thailand barred all app-based taxi service operators who use personal vehicles; a Spanish judge ordered a temporary halt to the company's operations in the country; and the city of Portland, Ore., issued a cease-and-desist order and filed a lawsuit against Uber.

Uber also faces a legal challenge in its own backyard. On Tuesday, the district attorneys of San Francisco and Los Angeles sued Uber for allegedly misleading consumers and said they are seeking a permanent injunction of the business until it complies with California law. The suit alleges, among other issues, that Uber is misleading customers into believing it screens out drivers who have committed criminal offenses.

News of the Uber investment was first reported by Chinese state media China National Radio.

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