Bottom line: Beijing needs to accelerate reform of traditional media in the face of rising challenges from players like Alibaba and Baidu, or risk seeing many of these state-run companies fall into irrelevance.
Alibaba challenges traditional media to speed up reform
A wave of mega-mergers sweeping through China’s Internet over the last 2 years saw its biggest deal to date announced late last week, when e-commerce leader Alibaba (NYSE: BABA) offered $4.6 billion for the more than 80 percent of leading online video site Youku Tudou (NYSE: YOKU) it doesn’t already own. The move marked the latest challenge to China’s traditional media industry, which has been monopolized for years by state-run broadcasters and printed publications.
If this latest mega-deal gets completed, a new Youku Tudou with access to Alibaba’s cash and other vast resources will almost certainly accelerate its challenge to traditional media by aggressively rolling out compelling new on-demand products and premium content. Read Full Post…
Bottom line: A new 1 billion yuan co-production tie-up for iQiyi marks the latest bid by Baidu to build up its new businesses through big spending, but could pressure Baidu’s shares due to shorter-term profit erosion.
iQiyi, Shanghai New Culture in production tie-up
I have to credit Internet giant Baidu (Nasdaq: BIDU) for sticking to its guns with its recent strategy of aggressive spending on acquisitions and tie-ups as the centerpiece of a drive to diversify beyond its core search business. That strategy put a big damper on Baidu’s profit growth in its latest quarterly results, sparking a sell-off that has seen its stock lose more than a third of their value this year.
And yet despite those concerns, Baidu continues to aggressively pour money into its emerging new businesses, many of them companies that are growing fast but are also losing big money. That’s certainly the case with Baidu’s latest investment, which will see it pour 1 billion yuan ($160 milllion) into a new co-production deal between its iQiyi online video unit and a Shenzhen-listed film production house called Shanghai New Culture (Shenzhen: 300336). Read Full Post…
The following press releases and media reports about Chinese companies were carried on August 1-3. To view a full article or story, click on the link next to the headline.
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Hisense (Shanghai: 600060) Pays $23.7 Mln for Sharp Corp Mexico Operations (Chinese article)
Renren (NYSE: RENN) Acting CFO Resigns, Interim CFO Appointed (PRNewswire)
The following press releases and media reports about Chinese companies were carried on November 2-4. To view a full article or story, click on the link next to the headline.
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Qunar (Nasdaq: QUNR) Doubles In Debut As Chinese Stocks Make US Comeback (English article)
Lenovo (HKEx: 992) To Enter US Handset Market (English article)
China Construction Bank (HKEx: 939) Buys 76 Pct Of BicBanko For $720 Mln (HKEx announcement)
PPTV Won’t Enter Smart TV After Suning (Shenzhen: 002024) Investment – CEO (Chinese article)
Canadian Solar (Nasdaq: CSIQ) In 100MW Supply Deal With 3 Gorges New Energy (PRNewswire)
The following press releases and media reports about Chinese companies were carried on October 29. To view a full article or story, click on the link next to the headline.
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Suning (Shenzhen: 002024), Hony Capital To Invest $420 Mln In PPTV (English article)
Telecoms Regulator Requires Handset Makers To List Pre-Installed Apps (English article)
This year’s shake-up of the online video space is taking yet another turn, with word that Sohu (Nasdaq: SOHU), one of China’s top 3 services, has agreed to buy rival Xunlei’s service called Kankan. If true, this development would be quite exciting, as it would mark the rise of a third major player in the space that is undergoing a major consolidation. Youku Tudou (NYSE: YOKU) remains the industry leader after its formation last year with the merger of China’s 2 largest video sites. Baidu’s (Nasdaq: BIDU) iQiyi is emerging as a strong number 2 after its acquisition of PPS in May for $370 million. Sohu previously operated China’s second largest video sharing service, and a purchase of Xunlei Kankan would comfortably bolster its place as one of China’s top 3 sites. Read Full Post…
China’s smart TV space has gotten a big lift in recent months with a flurry of major new developments, including 2 major new moves this past week by industry veteran LeTV (Shenzhen: 300104). This sudden rush to smart TVs, which deliver most of their content over the Internet, is being driven by a number of factors that make China ideal for development of the market. Read Full Post…
The following press releases and media reports about Chinese companies were carried on September 25. To view a full article or story, click on the link next to the headline.
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Suning (Shenzhen: 002024) In Advanced Talks To Buy PPTV For $400 Mln – Source (Chinese article)
Microsoft, BesTV (Shanghai: 600637) to Invest up to $237 Mln in China Venture (English article)
US Solar Group Offers Proposal To End US-China Panel Dispute (Group announcement)
KKR, Modern Dairy (HKEx: 1117) To Build Large Scale Farms in Shandong (Businesswire)
Alibaba Launches Taobao C2C Service In Singapore (English article)
