Bottom line: Zhou Hongyi should be commended for completing his privatization of Qihoo in the face of numerous obstacles, though his plans to re-list his company in China might take at least 1-2 years.
Qihoo completes de-listing
I haven’t always been a fan of security software specialist Qihoo 360 (NYSE: QIHU) over the years due to some of the overly aggressive and often ethically questionable business practices of chief Zhou Hongyi. But I have to admire the outspoken Zhou today, following word that he has reportedly just completed the biggest buyout of a US-listed Chinese company in history despite facing numerous obstacles that seems unsurmountable at times.
Far smaller US-listed Chinese companies have abandoned their plans to privatize due to choppy markets and the difficulty of completing such deals. But Zhou remained steadfast throughout in his desire to privatize his company, with the result that Qihoo’s shares will officially de-list with the start of trade on Monday, July 18, according to new Chinese media reports. (Chinese article) Read Full Post…
Bottom line: Baidu could suffer more lost business after purging stealth advertisers engaged in gambling and sex services, while its new credit-scoring tie-up looks like a smart way to take advantage of its huge volumes of user data.
Baidu purges search results of online gambling sites
A day after appearing in 2 major global entertainment stories, online search leader Baidu (Nasdaq: BIDU) is back in the headlines at home in a new scandal involving online gambling sites that used stealth methods to promote themselves on Baidu’s search service. Normally I would say this particular scandal looks relatively minor and wouldn’t have a major impact on Baidu. But such scandals have suddenly become much bigger news following one back in May, which was centered on Baidu’s longtime practice of combining paid search results with organic ones without disclosing that mixture. Read Full Post…
Bottom line: A Chinese group’s decision to downsize an earlier deal to buy Norway’s Opera was likely due to insufficient funds to complete the deal, but will still give Qihoo an important new browser asset in its drive to go global.
China group downsizes deal for Norway’s Opera
Just a day after trumpeting its successful privatization from New York, software security specialist Qihoo 360 (NYSE: QIHU) is being more low-key in announcing the new failure of its bid for Norwegian browser maker Opera (Oslo: OPERA). In fact, Qihoo was really just one member of a group that bid $1.2 billion earlier this year to buy Opera, owner of the world’s fourth most popular web browser. (previous post) Following the decision to scrap the sale, the 2 sides have simultaneously announced a smaller deal that would see the Chinese group buy about half of Opera’s assets for about $600 million. Read Full Post…
Bottom line: Beijing needs to overhaul its new energy vehicle policies to reward companies that truly innovate and manufacture cars that buyers are really driving.
BYD loses bulk of big bus order
A series of headlines last week showed how fat and even corrupt China’s booming electric vehicle (EV) sector has become in a very short time, spotlighting an urgent need for reform. The sector’s rapid evolution to its current state repeats a familiar pattern, which sees huge amounts of wasted investment and other inefficiencies emerge when local governments and inexperienced companies flock to industries targeted by Beijing for rapid development. Read Full Post…
Bottom line: Baidu’s Robin Li could announce a deal later this week to buy 40 percent of soccer club AC Milan, while his company’s pursuit of Paramount was likely killed by internal fighting at the Hollywood studio.
Paramount spurns Baidu, Wanda
Internet search leader Baidu (Nasdaq: BIDU) is in a couple of major entertainment headlines as the new week begins, led by word that it could finally announce a highly anticipated deal that would see it buy a major stake of European football club AC Milan. At the same time, separate new reports are saying that the company was rejected in a recent bid for a strategic stake in Hollywood giant Paramount, the studio arm of Viacom (NYSE: VIAb). Those same reports are saying Wanda Group, another Chinese entertainment aspirant, was also rejected in pursuit of a similar deal. Read Full Post…
Bottom line: China Telecom’s cancellation of roaming fees and focus on the Internet of Things signal it wants to become a leader and aggressively roll out new services under its new chairman Yang Jie.
China Telecom to end roaming fees
Just days after receiving a vote of confidence by a major global investor, China’s smallest mobile carrier China Telecom(HKEx: 728; NYSE: CHL) is showing new signs of life that make it look a potential company to watch among the nation’s stodgy big 3 teclos. Those signs are coming in one of the first major speeches from China Telecom’s new chief, who says the telco will become China’s first to eliminate domestic roaming fees, a move that was long overdue but has been strongly resisted by the sector. At the same time, Yang Jie is saying China Telecom will place strong emphasis on Internet of Things services, which many believe are the wave of the future. Read Full Post…
This week’s Street View centers on Xuhui District, where 2 major developments spotlight how rapid changes are creating headaches for some residents and undermining businesses that were formerly thriving. The first development sent shockwaves through the expat party-going crowd, as Xuhui’s top official announced plans to shut down most of the bars and restaurants on the trendy Yongkang Lu in the former French Concession area. Read Full Post…
Bottom line: Car Inc’s hired car services unit’s $5.5 billion valuation on China’s New Third Board is hugely overinflated, while Yidao’s new clash with Tencent shows the regulator needs to become more active in oversight of WeChat.
Two of China’s second-tier hired car services providers are in the headlines heading into the weekend, as these smaller companies fight an uphill drive to attract attention away from industry giants Didi Chuxing and Uber. The larger of the 2 stories has the hired car services unit of car rental leader Car Inc (HKEx: 699) receiving approval for a listing on China’s over-the-counter (OTC) New Third Board, valuing the company at a hefty 37 billion yuan ($5.5 billion). The second story has Yidao getting in a tussle that has seen promotion of its services blocked on Tencent’s (HKEx: 700) wildly popular WeChat platform . Read Full Post…
Bottom line: Xiaomi’s new campaign that includes the hiring of 3 celebrity spokespeople and an aim of moving upscale looks like a move of desperation and is unlikely to produce strong results due to difficulty of making such a transition.
Xiaomi tries star power to revive fortunes
Struggling smartphone maker Xiaomi is having a bit of an identity crisis these days, as it tries to reposition itself in a bid to jump start its growth by becoming more mainstream. At the same time, the company also wants a more upscale image as part of its new look, in a nod to the intense competition that has thrust many makers of lower-end models into the red. To make the transition, the company is embarking on a major new campaign that includes the hiring of 3 big celebrities to promote the new image. Read Full Post…
Bottom line: Google’s new opening of an experience center in Shenzhen is the latest signal of a planned return to China, which could include the launch of a Google Play Store and Nexus smartphones in the market by year-end.
Google opens experience center in Shenzhen
After a few months of relative silence, global Internet titan Google (Nasdaq: GOOG) is back in the China headlines with a new move that’s restarting talk of a return to the market after a 6-year absence. This particular China homecoming has now been in the headlines for about a year, meaning it’s not really new and would be quite a disappointment if it doesn’t happen. Still, China is a notoriously difficult place to do business, especially in sensitive high-tech areas involving the Internet, and there’s still a small chance such a homecoming plan could collapse. Read Full Post…
Bottom line: GIC’s investment in China Telecom represents a vote of confidence in the company over the next 2 years, as it makes strong gains in 4G and data services and could become more aggressive under new leadership.
GIC bets on China Telecom
China’s smallest wireless carrier China Telecom(HKEx: 728; NYSE: CHA) has just received a vote of confidence from one of the world’s better-known global investors, with the new disclosure that Singaporean sovereign wealth fund GIC has purchased 5 percent of the telco’s Hong Kong-listed shares. That decision comes amid mixed signals coming from China Telecom, which has just received new leadership after its former chairman was booted out for corruption. On a more positive note, China Telecom has been posting strong growth in its year-old 4G business, though the foundation for that growth was largely laid by yet another previous leader who left the company about a year ago. Read Full Post…
