Bottom line: Facebook’s new hire of a top WeChat executive could be the latest signal that it expects to get permission to launch a China-based service soon, possibly by the end of this year.
WeChat exec defects to Facebook
Following several months of relative silence, social networking (SNS) giant Facebook (Nasdaq: FB) is back in the China headlines, with word of a major executive poach from China’s leading SNS company. This particular headline is filled with mixed signals. On the one hand, the hire of a former top executive from WeChat looks like a significant move closer to China, since the hugely popular Chinese SNS operator would be Facebook’s main rival if it’s ever allowed into China. But on the other hand, the executive is a foreigner from WeChat’s international division, which has been a poor performer in the service’s weak attempts to go global. Read Full Post…
Bottom line: LeEco’s plan to develop a major Silicon Valley office on land purchased from Yahoo reflects the rapid rise and global ambitions of the former, and the accelerating decline of the latter.
LeEco eyes new Silicon Valley home
A new report involving a Silicon Valley land deal is shining a spotlight on Chinese Internet giant LeEco (Shenzhen: 300104) and US counterpart Yahoo (Nasdaq: YHOO), illustrating the rapid rise of the former and accelerating descent of the latter. The deal itself is rather mundane, involving a 48.6 acre plot of undeveloped land that Yahoo bought a decade ago for $100 million near its Silicon Valley headquarters. LeEco is reportedly eyeing the land for development of a new campus, some 2 years after it set up its original dual US headquarters in Silicon Valley and Los Angeles.
LeEco, formerly known as LeTV, is one of China’s fastest rising online entertainment companies that is increasingly moving into a wide array of new product areas. Two of those are e-commerce and smart cars, and I suspect the Silicon Valley expansion would house both of those initiatives. LeEco is also moving into film production, though that element of its US efforts is probably based out of its Los Angeles office. Read Full Post…
Bottom line: Mark Zuckerberg’s meeting with Chinese President Xi Jinping and new China-related remarks by Sheryl Sandberg show Facebook is closing in on a goal of launching its signature service in China, with a breakthrough possible as soon as next year.
Facebook thrives on China ad sales
Despite being blocked in the world’s largest Internet market, social networking (SNS) giant Facebook (Nasdaq: FB) is using every opportunity to quietly remind the world that it’s determined to include China in its global footprint. Just a week after company founder Mark Zuckerberg met with Chinese President Xi Jinping at a high-profile event in Seattle, his chief deputy Sheryl Sandberg was quoted at an event in New York talking up the big business Facebook is already doing in China.
Company watchers will know that Facebook quietly opened a China office in Beijing last year, with an aim to courting local advertisers seeking to reach the company’s global audience of 1.5 billion users. That business is doing quite well, according to Sandberg, though the Facebook’s ultimate China goal is still its eventual entry into a domestic Internet market that boasts nearly 700 million web surfers. Read Full Post…
Bottom line: Netflix may be in talks to enter China through a joint venture, but is unlikely to reach a deal for at least the next 1-2 years due to regulatory turbulence and tough restrictions in the rapidly changing market.
Netflix eyes China
Investors are getting excited about reports that leading US video streaming site Netflix (Nasdaq: NFLX) is in talks to come to China, in what would be the first such move by a major foreign video operator. The prospect of such a move would indeed be exciting, especially since it could come in partnership with a company closely tied to Chinese e-commerce leader Alibaba (NYSE: BABA). But I would caution that this particular market is a very tricky one due to China’s strict censorship policies, and also recent resistance to private companies from traditional state-owned TV stations. Read Full Post…
Bottom line: A merger between Youku Tudou and iQiyi looks like a strong possibility because it would greatly benefit both companies, creating a clear market leader to rival LeTV and traditional broadcasters.
Youku Tudou in merger talks with iQiyi?
Rumors that former online video leader Youku Tudou (NYSE: YOKU) is in talks to merge with rival iQiyi have reignited interest in the former’s beleaguered stock, as investors get excited about another landmark deal in the space. Youku Tudou’s shares soared 17 percent in the latest trading session, and have now nearly doubled since the beginning of April.
The sourcing is quite vague on the reported talks for a merger with iQiyi, which is owned by online search leader Baidu (Nasdaq: BIDU). But I would give the reports a strong chance of being true, as this kind of a move seems consistent with past behavior of Youku Tudou’s CEO Victor Koo, who is highly practical and thus would seriously consider selling his company if such a move made financial sense. Read Full Post…
Bottom line: LeTV’s new smartphones should generate major buzz when they go on sale this weekend and could easily sell 1 million units in their first 3-4 months, challenging domestic “cool” incumbent Xiaomi.
LeTV takes pre-orders for new smartphones
Smartphone sensation Xiaomi has emerged as one of China’s hottest tech names in the last few years with its cool and trendy image, focusing its sights largely on global leaders Samsung (Seoul: 005930) and especially Apple (Nasdaq: AAPL) as it looks for a place on the global stage. But this globally-minded company could soon have to watch its back as well, with the recent meteoric rise of LeTV (Shenzhen: 300104) as the newest hipster in town.
LeTV went largely unnoticed for the first part of its life, when it was mostly an Internet-based provider of video content similar to YouTube. But it has zipped into the spotlight over the last year, first as it posed a serious challenge to China’s traditional broadcasters and now as it rolls out its own new line of smartphones. Read Full Post…
Bottom line: TVB’s choice of a Shanghai-based traditional broadcaster as its mainland partner looks like a bad selection to ensure its future, as such traditional media rapidly get overtaken by more nimble Internet-based players.
TVB places bets on Shanghai Gang
Hong Kong has been buzzing this past week over the latest mainland encroachment on its media sector, which is seeing leading broadcaster TVB (HKEx: 511) sell a stake in itself to a Chinese investor. But few have gone past the headlines to see what’s really behind this deal, and whether it can help to ensure the longer term survival of a company that has long dominated Hong Kong’s broadcasting scene. In a nutshell, TVB is placing its bets on a group of Chinese media high-flyers that I like to call the “Shanghai Gang”, because they are rooted in China’s largest media market and have strong ties to the city’s monopoly broadcaster, Shanghai Media Group (SMG). Read Full Post…
Bottom line: More Chinese online video companies could soon follow LeTV onto the global stage as their home market soars, providing competition in smaller markets to locally entrenched players like Hong Kong’s PCCW and TVB.
LeTV marches into HK
China is generally considered a technology follower rather than a leader, but new data are showing an exciting trend that could see it finally emerge as a global innovator in Internet-connected video services. The factors behind this movement are uniquely Chinese, and stem from a huge pent-up demand in China for quality video services. Such services are finally starting to come from a growing range of private companies led by names like LeTV (Shenzhen: 300104), Xiaomi and Youku Tudou (Nasdaq: YOKU), which are far more innovative and nimble than the stodgy state-run firms that dominate the traditional broadcasting sector.
Those newer companies are showing early signs of trying to go global, using Hong Kong and other Southeast Asian markets as their stepping stones onto the world stage. Such markets are relatively small and rely heavily on western content, making them particularly fertile ground for some of these Chinese firms that can create and distribute content more suitable for Asian audiences. Read Full Post…
Bottom line: AP’s willingness to consider new tie-ups with Xinhua is the result of economic pressures being felt by western media, but is unlikely to produce any major alliances due to the potential for negative publicity.
AP open to deeper partnership with Xinhua
Rapid changes in the traditional media realm are creating some strange bedfellows, and the situation looks even stranger in China due to the strong elements of censorship and state control. That odd combination of circumstances is creating a perfect storm that has led some western media companies to do the previously unthinkable and consider partnerships with some of China’s most centrally controlled media. Recent rumors have said that global financial news leader Bloomberg may be considering such a tie-up, and now the latest reports are saying US media giant Associated Press (AP) is also open to such partnerships. Read Full Post…
Bottom line: LeTV could be a company to watch as it embarks on a global expansion, drawing on a savvy business model that sells smart TVs and smartphones at low prices in exchange for video subscription contracts.
LeTV makes cryptic debut at trade show
A major telecoms show happening this week in Spain was filled with small bits of news, but one of the biggest surprises came when I stumbled on an area decked out with signage for the racy online video firm LeTV (Shenzhen: 300104). So far as I could tell, none of the company’s many rivals like Youku Tudou (NYSE: YOKU) and iQiyi were at the show, and even global leader YouTube was absent. That’s not hard to understand, since the Mobile World Congress taking place in Barcelona is a telecoms show whose main attendees are telecoms equipment and smartphone makers. Read Full Post…
Bottom line: SNS operator Tumblr could quickly find its site blocked in China if it rolls out a Chinese-language edition targeting mainland users without taking formal steps to enter the country.
Tumblr eyes China
News that US social networking site (SNS) Tumblr is eying the China market looks intriguing, as it would come not long after professional networking site LinkedIn (NYSE: LNKD) entered the market and as industry titan Facebook (Nasdaq: FB) lobbies hard for its own Chinese presence. But what most caught my attention about this latest development was the somewhat humorous headline in one report noting that Tumblr is “still not blocked in China”.
Of course the implication is that once Tumblr formally launches a Chinese language edition of its popular blogging and SNS service, it could very easily find its site blocked by China’s Internet police. Read Full Post…
