Search Results for: video lawsuit

Youku Wows With Outlook, Dangdang With Marketplace

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Dangdang notches strong marketplace growth

Today marks the official highpoint of earnings season for US-listed Chinese companies, with at least 4 of the ones I cover reporting their results. With all that information flooding into the market, I thought I’d look at video site Youku Tudou (NYSE: YOKU) and e-commerce company Dangdang (NYSE: DANG), 2 money losers that are trying desperately to claw their way to profits. The news looks positive for both, with Dangdang reporting its losses continue to shrink as Youku has finally come out and dared to utter the word “profit” in its latest report. Read Full Post…

Qihoo Takes Baidu To Court, Xiaomi Sued Again

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Baidu, Xiaomi face new lawsuits

I love a good case of irony, which is why I was amused to read that software security specialist Qihoo 360 (NYSE: QIHU) is suing leading search firm Baidu (Nasdaq: BIDU) for unfair competition. The irony lies in the fact that Qihoo is notorious for using underhanded tactics against its rivals and is now accusing Baidu of similar behavior. Perhaps Qihoo should instead be congratulating Baidu for winning over its rival to the Dark Side. Meantime in separate legal news, up-and-coming smartphone maker Xiaomi is being sued for the second time in a week in relation to its smart TV products, hinting that this new product area could face an uphill battle from a flood of litigation. Read Full Post…

Beijing Stiffens Resolve to Tackle Economic Crime

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Beijing stiffens penalties for economic crimes

Two recent cases show that China is finally getting serious about punishment for economic crimes, a crucial step needed to clean up the nation’s often unruly business environment. The stricter punishments in both cases could mark the end of an era where such crimes faced little or no consequences, the result of lax guidelines from a socialist era when everything was state-owned. Read Full Post…

Tencent in Monopoly Spotlight; Baidu Next? 腾讯被诉垄断 下一个是百度吗？

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An important trial has just begun in southern Guangdong province, testing China’s young anti-monopoly law and its legal system in a case that could spell big headaches for leading Internet firm Tencent (HKEx: 700). Analysts also point out the case could have a domino effect for other areas where a single company dominates the Web, with online search leader Baidu (Nasdaq: BIDU) perhaps the most vulnerable to a similar lawsuit. But let’s look at the Tencent case first, as that’s the main point here. Perhaps appropriately, the case is being bought by Internet software company Qihoo 360 (NYSE: QIHU), a seasoned veteran with litigation in China, having been sued numerous times by others, including Tencent, and also filing numerous lawsuits of its own against rivals. This latest case has Qihoo suing Tencent for monopolistic practices in the instant messaging space, claiming Tencent’s wildly popular QQ service has a virtual lock on the market. (Chinese article) The case, which began on Wednesday morning，has Qihoo seeking 150 million yuan, or about $24 million, in damages. Chinese courts rarely award that much money due to legal restrictions, but even if they did such an award would be trivial to a company like Tencent that has a market cap of $56 billion and a huge cash pile. Of course the much bigger threat is that the court will determine that Tencent does indeed have an instant messaging monopoly, which it has used to quickly gain dominance in other Internet spaces such as online games. From my perspective, Qihoo’s case does indeed look convincing, as Tencent currently controls more than 70 percent of the instant messaging market. I personally don’t use QQ, but in my experience the only other platform that has any users at all in China is Microsoft’s (Nasdaq: MSFT) MSN, whose service is basically just a copy of its global product and is far less popular among Chinese users. A court ruling against Tencent would be interesting for a number of reasons, all of which would obviously be bad for the company. Qihoo and others are clearly interested in seeing the court order Tencent to de-link QQ from its other initiatives, as that would seriously hamper the company’s ability to take advantage of its massive instant messaging user base to quickly develop into other areas like search, online video and e-commerce. But the court, if it rules against Tencent, should also take steps to break its instant messaging monopoly, which is what the anti-monopoly rule was designed for. Of course, if the court rules against Tencent the next major target would be Baidu, which also controls more than 70 percent of China’s search market, the legal definition for a monopoly. Accordingly, China Internet watchers and investors should be paying close attention to this case, which could have big implications for both Tencent and Baidu stock.

Bottom line: Tencent will suffer a big setback if a court rules it has a monopoly in instant messaging, potentially paving the way for a similar lawsuit against Baidu.

Related postings 相关文章:

◙ Tencent Search: Baidu Beware? 腾讯搜搜成功关键依赖创新

◙ Search Wars Heat Up With Latest Anti-Baidu Moves 中国网络搜索战升温

◙ Baidu’s Strong Growth Underwhelms 百度业绩持续强劲增长将投资者期望抬升过高

Baidu: Addicted to Piracy 百度：沉溺于盗版

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Baidu (Nasdaq: BIDU) may be China’s undisputed Internet search leader, but new reports circulating about an abrupt collapse of talks over a new video partnership illustrate just how dependent this company is on less-than-ethical business practices like piracy and stealth advertising for its rapid growth. Chinese media are reporting that Baidu has ended discussions that would have brought online video to its service through a new partnership with LeTV (Shenzhen: 300104) after Baidu refused to LeTV’s condition that it eliminate pirated video from its video search site results. (English article) While other major Internet sites seem to be making a real effort to eliminate pirated music, video and other copyrighted material from their sites, Baidu has made some high-profile announcements to try to convince people it is making similar moves, while quietly allowing pirating activity to continue unabated on its sites. The company announced a major new initiative last year to offer legal music over its site in a tie-up with several major record labels, only to add it had no plans to simultaneously close its older popular music sharing site where piracy is so rampant that the major global music labels filed a lawsuit against Baidu several years back. (previous post) This latest development just underscores how addicted Baidu is to piracy, one factor that has helped it to triumph in the domestic search market over global players like Google (Nasdaq: GOOG) and Yahoo (Nasdaq: YHOO), ,which actively police their sites to keep off pirated material. This addiction to piracy is just one of Baidu’s less-than-ethical practices. The other big one is its reported willingness to manipulate search results for anyone willing to pay for such services. That includes not only giving advertisers high placement in search results without telling web surfers that such high placement was paid for, but also reportedly other things like conveniently removing negative news from search results for any individual or company that is willing to pay. So why does Baidu engage in such practices when clearly they go against international standards? The answer is simple: because it can, and because such practices are one of the main drivers for the high growth rates have made Baidu stock a darling of investors. I have no doubt that Baidu will continue to engage in such practices, and a smart, well-funded competitor like Google or Tencent (HKEx: 700) should take advantage of the situation to launch a campaign to inform the public and steal some of Baidu’s traffic. But that looks unlikely to happen anytime soon, meaning Baidu will continue with its current practices for the foreseeable future until someone — be it consumers, a rival or the government — finally steps in and says “enough is enough”.

Bottom line: The break-up of talks for a online video tie-up between Baidu and LeTV underscores Baidu’s dependence on piracy as a major driver of traffic to its site.

Related postings 相关文章:

◙ After Years, Baidu Does the Right Thing 百度多年来的一个正确之举

◙ Baidu Video Tries Blockbuster Licensing

◙ Baidu Comes Under Government Fire 政府“修理”百度

Confidence Crisis Easing For US China Stocks 中国概念股信任危机缓和

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While it’s never too smart to call a major market turnaround, growing signs are emerging that last year’s confidence crisis for US-listed China stocks may have finally turned a corner, with a strong rebound on the horizon if the broader market remains healthy. The first 2 months of the year have seen several positive developments for Chinese stocks in New York, following a disastrous 2011 that most would rather forget as their shares were pummeled by a series of accounting scandals that undermined the entire sector. Sensing that the worst of the crisis is over, 3 Chinese companies have filed for new US listings in the last few weeks, betting that investors will once again be interested in the China growth story. At the same time, short sellers and lawyers who seized on the crisis to make quick bucks have found far less success in some of their most recent attacks, indicating investors are once again giving Chinese companies the benefit of the doubt now that many more questionable firms have been de-listed. The nascent return of confidence is most evident in the share prices for many US-listed Chinese firms, some of which fell by 50 percent or more last year at the height of the crisis that began with attacks on 2 names, financial services company Longtop Financial and timber firm Sino-Forest. Both companies saw their shares tumble after short sellers questioned different aspects of their accounting, and Longtop was ultimately de-listed. Since bottoming out in mid December, shares of many industry stalwarts that were dragged down in the crisis have posted a strong recovery, with Internet search leader Baidu (Nasdaq: BIDU) and top web portal Sina (Nasdaq: SINA) both up about 20 percent since mid-December. Even smaller names have joined in the rally, with social networking site Renren (NYSE: RENN) and online video site Youku (NYSE: YOKU) both up by 30 or more. Equally significant has been the failure of a number of short seller attacks, which netted big bucks for companies last year. Muddy Waters, whose name became synonymous with the attacks after its successful assault on Sino-Forest last year, has found much less success with a more recent attack on Focus Media (Nasdaq: FMCN). Focus shares initially fell sharply after Muddy Waters questioned some of its data late last year, but have rallied sharply since then and are now close to their pre-attack levels. A similar attack late last year on security software firm Qihoo 360 (NYSE: QIHU) has also failed to convince investors, with the company’s stock now trading near pre-attack levels after initially falling more than 10 percent. At the same time, a series of recent investor lawsuits designed to seize on a drop in the share price of IT outsourcing firm Camelot Information Systems (NYSE: CIS) has also failed to dent the company’s stock price, again indicating investors may feel the worst is past and these Chinese companies are now more trustworthy. As the confidence creeps back, a small trickle of Chinese companies have decided to test their luck with the New York IPO market. Car rental firm China Auto was first out of the gate when it filed for an offering in January, ending several months with no major new Chinese listings. It was followed this month by e-commerce firm Vipshop and Shanda Cloudary, which initially filed for an IPO last year but had to pull the offering due to poor investor sentiment at the height of the crisis. The real test of whether the worst is really past will lie in the weeks ahead, as these 3 offerings go to market and meet with either investor interest or more skepticism. I personally think China Auto could do well, though the 2 Internet offerings could meet with more tepid interest as both are still losing money. Still, if these 3 can post even modest success, which looks like a strong possibility, it could signal the crisis has truly turned the corner, meaning a solid rally may be in store for these stocks for the rest of the year.

Bottom line: Growing signs are emerging that the confidence crisis for US-listed China stocks may be over, with 3 upcoming IPOs providing a strong test of a turning point for the battered sector.

Related postings 相关文章:

◙ Outlook Cloudy As Shanda Refiles for Literature IPO 盛大文学重启赴美IPO计划

◙ Citron Keeps Up Qihoo Assault 香橼继续攻击奇虎

◙ Sharks Continue to Circle China Stocks 在美上市中国企业将持续面临做空和法律诉讼压力

Vipshop Vies For First Internet Listing of 2012 唯品会欲在赴美上市电商公司中力拔头筹

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An online discount retailer named Vipshop has taken an early lead in the race to become the first Chinese Internet company to list in the US this year, while the more established Sohu (Nasdaq: SOHU) has set up a new headquarters for its popular video service, laying the groundwork for its own US IPO for the unit. Meantime in other news for US-listed tech firms, IT outsourcing company Camelot Information Systems (NYSE: CIS) has been hit by a second class action lawsuit over a big drop in its share price, in what looks like another major headache for the company. Let’s look at Vipshop first, a relatively small company that is taking the bold move of being the first Chinese web firm to file for a US IPO this year, with plans to raise up to $125 million. (English article) The company looks similar to many other Chinese e-commerce firms in that it is losing money, posting a loss of $107 million last year amid stiff competition in the space. Considering its money-losing status and lingering broader doubts about the accounting practices of Chinese companies in general, this offering is likely to attract very limited interest and in all likelihood will fall in its trading debut. Investors interested in China IPOs would be better served to look at another company, car rental firm China Auto, which became the first Chinese firm this year to file for a US listing last month with plans to raise up to $300 million. (previous post) Meantime, Sohu has announced it will spend $20 million to set up a headquarters for its popular online video site in Tianjin. (Chinese article) The location of the office in Tianjin, clearly separate from Sohu’s own Beijing headquarters, indicates that Sohu is trying to develop this unit as its own entity and I would expect to see the company file for a potential US IPO for the unit as soon as the second half of this year, putting it alongside rivals Youku (NYSE: YOKU) and Tudou (Nasdaq: TUDO) as a publicly listed firm. Lastly, there’s Camelot, which after being hit by one class action shareholder lawsuit earlier this month, has now been hit by yet another one from another law firm specializing in such suits, after a sharp drop in the company’s stock in 2010 and 2011. (lawsuit announcement) Somewhat surprisingly, the stock hasn’t reacted very much to the lawsuits, and actually rose 2.5 percent on Friday. Perhaps that’s because its shares are already down sharply from the $25 level of about a year ago to their latest close in the $2.50 range. Maybe there’s a good buying opportunity here, though of course that’s assuming that Camelot can survive these 2 lawsuits.

Bottom line: Vipshop will attract weak investor interest as China’s first US Internet IPO of 2012, while Sohu’s latest moves indicate an IPO for its video business potentially by year end.

Related postings 相关文章:

◙ China Auto Wins 2012 Race For 1st US IPO 神州租车抢先成首个赴美IPO的中国企业

◙ Sohu Fails to Inspire With Latest Results 搜狐最新财报缺乏利好激励

◙ Sharks Continue to Circle China Stocks 在美上市中国企业将持续面临做空和法律诉讼压力

News Digest: February 18-20, 2012 报摘： 2012年2月18-20日

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The following press releases and media reports about Chinese companies were carried on February 18-20. To view a full article or story, click on the link next to the headline.

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◙ Proview Unveils iPad Lawsuit Details (English article)

◙ Suntech (NYSE: STP) Announces Preliminary Q4 and Full Year Results (PRNewswire)

◙ Sohu (Nasdaq: SOHU) Spends $20 Mln to Set Up Online Video Headquarters in Tianjin (Chinese article)

◙ Smith Electric Vehicles, Wanxiang Group Announce Investment and Joint Venture (Businesswire)

◙ New Class Action Lawsuit Filed Against Camelot Information Systems (NYSE: CIS) (PRNewswire)

◙ Latest calendar for Q1 earnings reports (Earnings calendar)

2011: A Breakthrough Year in Copyright Protection 2011年：中国版权保护取得突破的一年

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It seems quite appropriate that 2011 is ending with news that Internet search leader Baidu (Nasdaq: BIDU), which for years symbolized rampant disregard for copyrights on China’s unruly Internet, has been removed from a US list of “notorious markets” for piracy, capping a year that saw great progress in intellectual property protection. (English article) Baidu’s achievement after it signed a series of landmark licensing agreements with major music labels like Universal, Warner (NYSE: WMG) and Sony Music (Tokyo: 6758) in July as it launched a service selling legal copies of their music. (previous post) Baidu’s removal from the list was just the latest major advance in copyright protection, as China’s crowded field of online music and video sites all took new steps to secure exclusive content to set themselves apart from rivals in the competitive sector. The nation’s top 3 video sharing sites, Youku (NYSE: YOKU), Sohu video (Nasdaq: SOHU) and Tudou (NYSE: TUDO) all signed their first big licensing deals during the year to offer TV shows and films from the likes of Warner Brothers (NYSE: TWX) and Disney (NYSE: DIS). (previous post) Some domestic names like Huayi Brothers (Shenzhen: 300027) signed similar deals, as early signs emerged of a coming renaissance for domestic content makers, an increasing number of which are looking to domestic IPOs to fuel their growth. (previous post) In another interesting development just last week, Youku and Tudou filed a series of copyright infringement lawsuits against each other, showing that these companies themselves could emerge as a potent force to help police against future copyright violations. (previous post) Last but not least, many of the sites themselves are increasingly producing their own exclusive content, with Phoenix New Media (NYSE: FENG) and PPLive announcing such initiatives during the year, which should also help the programming industry’s development. (previous post) Of course, there is still much work to be done. Despite its launch of a legal music service, Baidu continues to operate its popular older music service where swapping of pirated songs is rampant. And while Baidu was removed from the “notorious” list, Alibaba’s Taobao, China’s e-commerce leader, remains on the list for the widespread sale of knock-off products on its site. Still, in all my years covering China tech and media, 2011 certainly looks like a year of major breakthroughs in copyright protection as Chinese firms finally wake up to the reality that piracy isn’t a very good long-term business model.

Bottom line: Baidu’s removal from a US piracy list reflects big progress in the anti-piracy battle in China in 2011, with the campaign likely to maintain momentum into 2012.

Related postings 相关文章:

◙ After Years, Baidu Does the Right Thing 百度多年来的一个正确之举

◙ Video Makers On Cusp of Renaissance 视频制作商或迎来美好时代

◙ Youku’s New Formula: Sponsored Programs 优酷“新配方”：赞助项目

Tudou, Youku: China’s New Piracy Police　　土豆和优酷：中国打击盗版的民间警察

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An entertaining tiff has broken out between China’s top 2 video sharing sites, with Tudou (Nasdaq: TUDO), the country’s second largest player, accusing top player Youku (NYSE: YOKU) of copyright violations, prompting Youku to counter with its own similar allegations. (Tudou lawsuit article; Youku lawsuit article) The series of actions are interesting less from a monetary perspective, but more because they show that China’s private sector may finally step in and become a much more effective policeman for protection of copyrights than Beijing has been, despite years of effort by the government to curb the problem. Let’s look at the actual news first, which saw Tudou complain to regulators that Youku ignored its repeated requests to take down episodes of a popular Taiwanese TV talk show that Tudou said it held the exclusive mainland Chinese rights for. Youku responded with its own accusations that Tudou was showing more than 60 TV programs which Youku holds the rights to. In addition to complaining to authorities, both companies are threatening legal action against each other. Of course, most people know China’s courts have proven an ineffectual avenue for resolving this kind of dispute, as decisions can take months or longer, and penalties are usually so small that they provide little or no deterrent effect. That said, the interesting thing here is that Youku and Tudou, as the industry’s top 2 players with big resources at their disposal, could potentially emerge as the kind of private sector policemen that China sorely needs to clamp down on piracy. For example, smaller Web firms that depend on trading of pirated movies and TV shows to bring traffic to their sites, might think twice if they are worried that big names like Youku, Tudou and Sohu (Nasdaq: SOHU) might take legal action against them or complain to regulators who have the power to shut them down. All of this can only be good news for the program makers themselves, like the big Hollywood studios and domestic names like Huayi Brothers (Shenzhen: 300027), which will be able to not only make bigger profits in China, but also be able to focus more on building their China distribution while leaving the business of clamping down on piracy to private sector players who also get hurt by copyright violators.

Bottom line: A spat between China’s top 2 video sites shows that such sites could emerge as a powerful private sector force to help stamp out video piracy in the country.

Related postings 相关文章:

◙ Sohu’s Blowout Earnings: IPO In Store for Video? 搜狐发喜报视频业务或上市

◙ Video Makers On Cusp of Renaissance 视频制作商或迎来美好时代

◙ Jishi the Latest in Low-Key Media Listing Parade 吉视传媒加入中国媒体低调上市大军

Tencent Search: Baidu Beware? 腾讯搜搜成功关键依赖创新

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Baidu (Nasdaq: BIDU) may be China’s undisputed search leader, but others are certainly eying the market and its big profit potential, as evidenced by a major new campaign planned for next year by top Internet company Tencent (HKEx: 700) to promote its Soso search engine. (English article) This campaign looks interesting, especially for its big price tag, and underscores the fact that Tencent and others like Sohu (Nasdaq: SOHU) and Alibaba won’t just automatically yield this lucrative market to Baidu. Whether or not any of them will succeed is a different matter. According to domestic media reports, Tencent will spend a hefty 1 billion yuan, or about $150 million, to promote Soso next year, a large sum considering that Tencent has only invested slightly more, around 1.2 billion yuan, in Soso over the last 5 years combined. After years of failing to gain traction with its Sogou service, Sohu in its latest results pegged search as one area where it is finally gaining some traction, with its search revenue soaring more than 200 percent as it finally gained enough market share — around 2.2 percent — to register on industry radar screens. (previous post) Baidu is still the clear leader in the space with nearly 80 percent of the market, followed by Google (Nasdaq: GOOG) at a distant second. Soso still has yet to gain anything close to significant market share, despite its 5 years in business. But that said, Tencent has a number of factors in its favor that could help it succeed, especially if it really carries through with its massive promotional campaign next year. The company was a relative latecomer to the online game business, yet went on to draw on millions of users for its popular QQ instant messaging service to overtake giants like Shanda (Nasdaq: SNDA) and NetEase (Nasdaq: NTES) to become the top player. Its recent tie-up with Kaixin, China’s second biggest social networking site (previous post), could give it millions more potential users for its search service. This kind of access to potential users is important to grow a search business, but in my view the really critical factor is innovation. In order to really succeed and challenge Baidu, Sogou, Soso or anyone else will have to offer something new and better that Baidu doesn’t offer. Tencent has shown a good record at such innovation in the past, and will need to use that skill again in order to make its Soso succeed.

Bottom line: Tencent’s new 1 billion yuan spending campaign on its Soso search engine could have a good chance of success if it can support its promotional dollars with strong innovation.

Related postings 相关文章:

◙ New Lawsuit Has Potential to Bite Baidu 百度或因新侵权诉讼案“受伤

◙ Sohu’s Blowout Earnings: IPO In Store for Video? 搜狐发喜报视频业务或上市

◙ Baidu, ZTE Earnings: More of the Same 百度和中兴财报：看上去没变化