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Baidu Gets It Right

By Rick Munarriz - Updated Apr 6, 2017 at 10:01AM

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Baidu builds up its own Groupon clone.

Groupon Mania is apparently a popular export.

China's e-Business Research Center claims that 1,200 Groupon-esque sites have launched in the world's most populous nation since January. Now the country's leading search engine is getting in on the fun.

Baidu (Nasdaq: BIDU) launched a group-buying initiative through its Youa e-tail platform last week, hoping to give its growing base of paid search advertisers a new way to drum up local leads in exchange for generous discounts on limited-time offers.

Baidu is doing exactly what the leading stateside portals should be doing in diving headfirst into this niche. If Groupon was able to go from launching its repurposed website two years ago to apparently rebuffing Google's (Nasdaq: GOOG) advances for more than $5 billion over the weekend, who wouldn't want in on this niche?

Google and Yahoo! (Nasdaq: YHOO) have been widely reported to have interest in acquiring Groupon in recent months -- until the bidding got too rich for their blood. Now it's just a matter of time before they follow Baidu's lead and turn to their massive advertiser Rolodexes and even wider audience attraction skills to cook up their Groupon killers.

Baidu is doing it right. A month ago, it launched its Shenbian hub, a Web 2.0 destination for users to post restaurant, hotel, and product reviews. It is incorporating its group-buying deal engine with Shenbian in a marriage that makes as much sense as peanut butter and chocolate -- or Mongolian beef with a side of white rice.

In other words, the company that commands more than two-thirds of China's search queries is creating its own version of Yelp and its own version of Groupon -- and padding them together like Play-Doh art.

Brilliant! Are you watching, Google? Taking notes, Yahoo!?

Both companies have enough bored engineers to code a Groupon clone during a lunch break. Then it's just a matter of slapping it over their roadmap platform. If they prefer something a little easier, they can snap up Yelp, OpenTable (Nasdaq: OPEN), or Travelzoo (Nasdaq: TZOO) -- niche-specific sites where the Groupon light bulb went off months ago -- and just ramp up the flash sales accordingly.

China's dot-com darlings have never been shy about aping successful Western companies. Baidu is in the process of making its paid search platform as transparent as Google. Behind every successful SINA (Nasdaq: SINA) new media addition, there's a handful of stateside startups that helped carve out the playbook by trial and error.

Now it's time for Google and Yahoo! to learn by Baidu's example. We all know social coupons are viral, lucrative, and growing in popularity.

Get on it, boys.

Do you think Baidu is a good buy at this point? Share your thoughts in the comment box below.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Alphabet Inc. Stock Quote
Alphabet Inc.
$2,863.10 (0.81%) $23.07
Travelzoo Inc. Stock Quote
Travelzoo Inc.
$10.06 (5.89%) $0.56
Baidu, Inc. Stock Quote
Baidu, Inc.
$147.65 (7.47%) $10.26
SINA Corporation Stock Quote
SINA Corporation
OpenTable, Inc. Stock Quote
OpenTable, Inc.

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