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A couple of Internet M&A deals are in the news as we head into the final days before the Lunar New Year, with word that leading search engine Baidu (Nasdaq: BIDU) has purchased more of group buying site Nuomi, while top Internet company Tencent (HKEx: 700) may be eyeing restaurant ratings site Dianping. The first deal could reflect a new pattern for Baidu, which has mostly bought controlling stakes but made few outright acquisitions in its recent spree of major purchases. Meantime, the latter deal would look good for Tencent if it was really happening, though I have major doubts about whether it is.

Word of the Nuomi sale to Baidu comes from Nuomi's former owner Renren (NYSE: RENN), operator of a Facebook-like (Nasdaq: FB) site that is struggling to stay relevant in China's fast-changing social networking (SNS) environment. Baidu paid $160 million for 59 percent of Nuomi in August (previous post), and now Renren is saying that it has sold its remaining stake for an undisclosed price. It's unclear if Renren owned the remaining 41 percent of Nuomi, which would be worth about $110 million at the previous valuation.

Regardless of how much Baidu is buying, the cost would be relatively minor for this cash-rich search leader. Baidu's initial purchase of the controlling stake follows a similar pattern in its recent major deals, including its 2011 purchase of a majority stake in online travel agent Qunar (Nasdaq: QUNR) for $300 million, and its more recent purchase last year of 57 percent of online app store 91Wireless for $1.1 billion (previous post). At the time of the 91Wireless deal, Baidu said it would attempt to buy the remaining 43 percent of the company from its other stakeholders.

I doubt the deal will have a major impact for Baidu, though perhaps it could try to now use Nuomi as a foundation to acquire some other group buying sites like LaShou or even sector leader Meituan. It took a similar approach last year when it combined its own iQiyi unit with its purchase of PPS to create China's second largest online video site. Meantime, the sale marks yet another step in the ongoing decline of Renren, whose social networking site is struggling and whose previously promising online game unit is also foundering.

Renren shares got a slight bounce after the news, but are still trading near an all-time low. Previous rumors had indicated that Baidu might be interested in buying Renren entirely after the original Nuomi deal, even though a spokesman denied that any such talks were happening. But with this latest sale and the fading appeal of Renren's remaining assets, I would be surprised if Baidu were to pursue such a bid.

From Baidu, let's look quickly at the rumors on a Tencent purchase of Dianping. The reports on this hypothetical deal are quite vague, only citing unnamed sources saying that the purchase has happened (English article). I'll openly admit that I'm writing about the deal only to be on the record in case it's really happening, and that I have major doubts about the veracity of the reports. Dianping runs a popular and profitable online restaurant ratings site often likened to U.S. leader Yelp (NYSE: YELP)

Dianping's low-key founder has said on numerous occasions that he's not in need of any cash, and that he has no plans for an IPO anytime soon. More broadly speaking, Dianping would be a desirable acquisition for almost any Chinese Internet company, and it did form a tie-up with Tencent's popular WeChat instant messaging service back in December (previous post). So from Tencent's perspective, a deal would certainly make sense, especially since it could combine Dianping with its related Gaopeng group buying site. But the deal makes less sense for Dianping, which isn't feeling any pressure to raise cash and has indicated its previous intent to remain independent.

Bottom line: Baidu could use Nuomi as a foundation to build up its group buying business with more purchases, while rumors of a Tencent purchase of Dianping are most likely untrue.

Disclosure: No positions

Source: Baidu Finishes Nuomi, Tencent Eyes Dianping