Bottom line: Baidu could buy a small stake in Xunlei but is unlikely to acquire the company outright as part of their new alliance, while 58.com’s plan to rebuild its newly acquired job site should have good chances of success.
58.com goes to work on ChinaHR
I’ve been predicting a marriage for a while for online video orphan Xunlei (Nasdaq: XNET), even as it remains stubbornly single despite its lack of scale to survive as an independent company. First it appeared the company might get bought by smartphone sensation Xiaomi after the pair boosted their strategic tie-up in May, but then nothing more happened. Now the gossip mills are likely to start turning again, following the latest announcement of a major partnership between Xunlei and Baidu’s (Nasdaq: BIDU) iQiyi online video service.
58.com
Meantime in another Internet news bit, the top executive at leading online classified ad site 58.com(NYSE: WUBA) is saying he will need 2 years to turn around the underperforming online job site ChinaHR, which he acquired earlier this year. His assessment comes after the site laid off nearly all of its staff as part of the deal that saw 58.com buy ChinaHR from its Irish owner. Read Full Post…
Bottom line: A worker rebellion over layoffs at an online recruitment site being bought by 58.com underscores the company’s inexperience at M&A, even though the purchase itself looks like a good move.
Workers rebel over layoffs at ChinaHR
Chinese media are flocking to news that leading online classified ad site 58.com (NYSE: WUBA) has begun slashing jobs at its newly acquired ChinaHR, just days after it announced it would purchase the struggling online recruitment site. The move looks a bit hasty and perhaps extreme, and also comes across as just slightly ironic since many people now losing their jobs may soon have to use rival services to find new work.
But irony aside, this particular story looks quite similar to something that happened just 2 years ago at the very same ChinaHR. In that case workers mutinied and even briefly held an executive hostage after its then-owner, US online recruitment giant Monster Worldwide (Nasdaq: MWW), also tried to lay off employees as part of its own plans to sell the company. If history repeats itself, which is showing early signs of happening, 58.com could be looking at some turbulent times ahead over the next week or two. Read Full Post…
Bottom line: 58.com’s new purchase of an online job site extends its spree of recent acquisitions and partnerships, which looks like a focused, well-conceived plan that could position it to emerge as a leading Chinese Internet advertising specialist.
58.com gets into jobs space
The savvy online classifieds site 58.com (NYSE: WUBA) is back in the headlines as we close out the week, with word that it’s signed a deal to purchase online job specialist ChinaHR. If true, the deal would mark the latest in a steady stream of acquisitions for 58.com, which looks well positioned to become a truly diversified leader in online classified advertising services.
Such a focused strategy looks much better than the more diversified M&A being practiced these days by China’s largest Internet companies, which are all venturing far beyond the core businesses that brought them their initial success. Of course it’s much easier for companies like 58.com to keep their focus due to their small size. Compared to names like Tencent (HKEx: 700) and Alibaba (NYSE: BABA), which are each valued at around $200 billion, 58.com still has a relatively small market value of about $7 billion. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 7. To view a full article or story, click on the link next to the headline. ══════════════════════════════════════════════════════
