After the long rumours spanning through weeks, finally Baidu Inc., the owner of China’s largest search engine declared that it is going to buy the PPS Net TV’s internet video business for a sum of $370 million. iQiyi.com has been the other recent acquisition of the company, and it is going to merge the two services to make it the biggest online video site in China, according to the numbers of the mobile users and viewing time.
Baidu buys PPS acquisition, can be credited to the views of the Chairman and CEO of the company, Robin Li, who prefers buying as one of the best options to build. As the company is in need of greater shares in sales of advertising over the online video business of the country, so it decided to start with acquiring the existing shareholders. According to iResearch, a Shanghai based Internet consulting firm, the revenue of the company is expected to see a leap to 16.2 billion yuan in 2014, which was recorded at 1.36 billion yuan in the year 2009.
Despite the indirect comments from the CEO, there is no denying that this acquisition will place Baidu as the daunting competitor to Youku Tudou Inc., which was previously reported as the biggest video site in China. Capturing the online video market has become an increasingly important concern for companies worldwide with the change in viewing habits of consumers. As another prominent example, Yahoo recently placed a bid of $200 million to buy a majority stake in Dailymotion, which is regarded as the YouTube of France. The offer was rejected by the French government as it did not want a USA based company to take a controlling share in a French operation, but if the deal had been permitted, it would have helped Dailymotion to emerge in the world arena.
According to the CEO of iQiyi, Gong Yu, this merger is a significant step towards consolidation and will have a high impact on China’s online video industry. This will help in development of better content and provide an improved user experience that will also come with better value for marketing.