Mac and His Cousin Cole Getting Ready for UW/Stanford

Qunar / Baidu – Why We’re Excited

On Friday, China’s leading Internet search player Baidu announced its $300 million investment in China’s leading travel web site, Qunar.  GGV Capital has been an investor in Qunar since 2009, and GGV Capital Partner Jixun Foo played a key role in working with the management team to orchestrate the deal (Jixun also used to serve on the Board of Baidu).  Following the transaction, Qunar will remain an independent company and all of its shareholders will retain equity in the new company along with Baidu.  We have long believed Qunar was one of the top emerging web properties in China, and the Baidu relationship should only further the company’s lead position in the travel market in China.

I’ve gotten a lot of questions from folks in the US about the Qunar/Baidu deal.  I was with Jixun in Shanghai this past weekend, and thought I would post a short Q&A with him to provide some context on Baidu/Qunar.

JR:  This is obviously something that has been in the works for some time.  What was the genesis of the idea and the conversation between the two companies?

JF:  At a high level, two things.  1) There’s a good relationship between the two companies and a lot of mutual respect.  2) There are obvious synergies between what Qunar is doing, and what Baidu wants to do in travel.  Both sides see the massive market opportunity, and given the strong relationship and respect, it wasn’t hard to begin a dialogue.

Qunar gets the best of both worlds – a strong alignment and the resources of Baidu plus the opportunity to continue to grow and expand as an independent company.

JR:  Can you give us a little perspective on the travel market in China, and why this is a “big deal?”

JF:  Historically, the travel market in China has been the opposite of the US.  In the US, the majority of the spend is on leisure/vacation travel.  In China, it has always been about business travel.  As incomes rise in China, we are seeing an increased spend on leisure travel.  With 1.3 billion people, it is obviously a market that has huge potential.  Fritz and CC were early to see the opportunity, and began building Qunar back in 2005.  Six years later, more than 44 million people visit the Qunar web site every month, conducting more than 4 million search queries every day.

If you think of what happened with the travel market online in the US, you have tens of billions of dollars of value created with companies like Expedia, Travelocity, Priceline, Hotwire, HomeAway, Kayak, etc.  In China, we’ve had Ctrip and eLong.  That’s it.  There’s plenty of room for a new player to emerge, and Qunar is poised to do so.  The relationship with Baidu should only accelerate this.

To use a US analogy, I guess this would be sort of like Google lining up with one of the top emerging web companies to go after a massive, high-profile category.  Travel is much more mature in the US, but perhaps Social or Mobile would be good analogies?

JR:  You were an early investor in Baidu and sat on the board for many years.  Today Baidu is one of the most valuable technology companies in the world, valued at more than $40 billion.  How do you think about Qunar in relation to what you saw in the growth years with Baidu?

JF:  Well, for starters, both companies have great management.  The founding teams hired great people around them, built great cultures and a ton of momentum in the market.  Robin (founder/CEO of Baidu) was an early visionary in the Internet space in China.  When he started Baidu, the market for Internet advertising in China was less than $50 million annually.  Today it’s more than $5 billion and growing rapidly.  The Internet space in China was a bit more mature when the team launched Qunar in 2005, but travel was – and still is – very early.  The number of travelers booking online, online travel spend and online travel media are all growing rapidly.  It’s still early in the life of Qunar, but the company has a ton of potential, which is why management and the investor group are so pleased we were able to structure a deal where the company remains independent.

JR:  I know you played a lead role in helping to structure this deal.  It must have felt great to see it come to fruition and have CC publicly thank you for your efforts?   (see Weibo post below)

JF:  The investor group as a whole – GSR and Tenaya along with GGV – was very supportive and instrumental.  Given my prior relationship with Baidu, I was certainly able to help move the ball forward, but CC, Fritz and the Qunar team working in conjunction with the Baidu team made this happen.  The investors are all retaining an ownership stake in Qunar, and are very excited to see where it goes from here.

 

 

 

 

 

The Weibo (similar to Twitter here in the US) post above is from CC, co-founder and CEO of Qunar.  It reads “GGV led the negotiation and made the deal possible, thanks a lot to Jixun,” followed by the deal announcement.

Chillin’ by the pool, celebrating a Giants win

Back on US Soil – Post Forthcoming

Could not access WordPress from China (I was in Shanghai all last week).  Lots to talk about.

Epic Day at Squaw

Haven’t had much time to write blog posts lately, but did have a great ski weekend at Squaw Valley with my oldest daughter, niece and brother-in-law this weekend!  (iPhone pic altered via Instagram)

Welcome to the BlueKai Team, TrackSimple!

Had a chance to spend some time with Jon, Ajit and the TrackSimple team yesterday at BlueKai’s annual meeting in San Jose.  Really fired up to have you guys on board!!!  See the TechCrunch article about the deal: “BlueKai Buys Ad Data Analytics and Optimization Startup TrackSimple”

Congratulations to BlueKai for Being Named AlwaysOn B2B Media Company of the Year!

Congrats to the team at BlueKai for being named B2B Media Company of the year by the folks at AlwaysOn.  While I am a bit biased (BlueKai is a GGV portfolio company and I sit on the board), I can tell you these guys are great entrepreneurs, work extremely hard, and are leading the charge in a whole new category of Internet marketing.   Well deserved recognition!

Great Interview with Tim W from Pandora on CNBC @ CES

As mentioned in my post on CES, Pandora was “everywhere” at CES. Great interview with founder Tim Westergren on CNBC.

Vodpod videos no longer available.

CES Recap

Polled the team at GGV for thoughts and insights from CES – below are a few of our team’s thoughts/summaries of the show.

My personal view. I’ve been going to CES for many years now.  From my perspective, this year’s was the most disappointing.  Yes, there were some cool new tv’s, and lots of tablets, and lots of cool gadgets and attachments to Apple stuff (a lot, in fact) – but there was nothing that made you go “wow!”  OK, maybe the Audi R8 Etron – an all-electric version of the R8 – which was pretty damn cool (check out the Wired video here).  In fact, with all of the announcements about Internet-connected cars (including lots of cool stuff from GGV portfolio company Pandora), one could argue that was the highlight.   Other than that, I wasn’t blown away.

Tablets were clearly “the big thing” this year.  One of my favorite quotes of the week: Friend of mine to rep at Motorola holding the new Moto tablet (Xoom) – “So…what’s the difference between this and the iPad?”  Moto rep responds “You’re the 651st person who’s asked me that today.”  To be fair, the Xoom does have some cool new features, is going to run on Android Honeycomb, and was named “Best Gadget” at CES.  However, one could not help feeling like many of the tablets at CES are a day late and a dollar short – that’s the best we can come up with 9 months after the iPad launched?

Glenn Solomon’s take.  One interesting observation – even though Apple isn’t present at the show, nearly half of all the exhibitors I saw were displaying direct or indirect linkages to Apple products.  Android was also quite prevalent.  It’s really amazing how much of the consumer electronics ecosystem is now ultimately controlled by these two forces.  And there are many companies whose market power is dwindling or gone – Sony, Motorola, RIM, etc.  Also, perhaps riding the Kinect wave, I saw a fair bit of 3-D and augmented reality.   This trend seems to be gaining a lot of steam.

Adam Altman’s take.  1) Lots of tablets, Samsung Galaxy appears to be only real competitor, we’re likely to see hundreds of Chinese knockoffs flood the market and bring down prices, 2) lots of wireless charging technology – why do I need it?, 3) TV’s are maxing out on core features, 3D still a big push but not clear consumers are biting, 4) on 3D TV’s, most manufacturers are pushing the active shutter glasses – an even harder bite for consumers when they’re $150 a pop.

Scott Bonham’s take.  Energy level was higher this year than last year.  Lots of cool but unnecessary gizmo’s flying off the shelves – see $500 ski goggles with GPS.

Kevin Chen’s take.  1) Everybody has a tablet design, and the hardware / operating systems are already commoditized and easy to do.  However, most except Apple do not know how they want to position their offering.  Say what you want about Cisco’s tab, at least they know where they want to go with it.  Everybody just seems lost, which might favor the mass suppliers such as Nvidia and Marvell.  Commoditization of tablets will be here soon, and I’m wondering if the tablet era will be just as short as the Netbook era.  2) I guess related to the point above, it is scary how many random Chinese and Korean companies Adam and I have never heard of that have these huge booths with full product lines.  The future is looking more crowded than ever for established American and European companies.

Hany Nada’s take.  For the fourth year in a row – didn’t see anything that was BREAKTHROUGH.  Dual screen laptops seemed to be a rising trend.  The Acer Iconia featuring Microsoft was cool.

Congrats to hiSoft

Congratulations to GGV portfolio company hiSoft (NASDAQ: HSFT) for finishing the year as the #2 performing IPO of the year in the US (up 202%).  The IPO market looks strong now, but that wasn’t the case back in Q1 and Q2 of 2010.  hiSoft and its cohort of IPOs in 2010 have set the table for what appears to be a strong market heading into 2011.

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