INTERNET: Taxi App Flies As Big Names Play April Fools
Bottom line: A round of April Fool’s Day pranks by China’s Internet companies marks a nice break from their usual cut-throat tactics, while the soaring valuation for a newly created taxi app leader looks more typical for the sector.
It’s a relatively quiet news day as we head into April, so I thought I’d take a break from all the latest crackdowns and controversies by looking at some of the clever pranks played by China’s top Internet names on April Fool’s Day. At the same time, one company that’s in no fooling mood is a new taxi app giant that’s being formed with a merger of the 2 top players, and could soon receive an impressive $8.75 billion valuation after a new investment.
These 2 particular headlines don’t really have much in common, since one is largely playful and meant to be fun while the other involves the far more serious business of determining a company’s value. The April Fool’s stories are a nice break from the usual competition and wars of words that are standard fare on China’s Internet. By comparison, bidding up valuations to inflated levels like we’re now seeing with the pending merger of Didi Dache and Kuaidi Dache has become standard fare on China’s Internet, as investors bet big on future growth in the market.
Let’s begin with the April Fool’s pranks, which are quite standard fare in the west but are far less common in China, where entrepreneurs take themselves and their businesses far more seriously. This round of April Fool’s pranks by the likes of Tencent (HKEx: 700), Baidu (Nasdaq: BIDU) and Alibaba (NYSE: BABA) marks one of the first instances I can recall of such widespread lighter-hearted actions, and almost looks coordinated. But perhaps these companies have engaged in similar actions in past years and I just haven’t noticed it.
Many of this year’s April Fool’s pranks involved bogus new products. But my award for one of the most creative goes to Tencent, which announced an unusual move that will see its data center relocate to a new office in the South Pole in 2017. (Chinese article) People less familiar with the company will know that’s a reference to Tencent’s trademark penguin logo, which also presumably resides somewhere in that area.
The people at Baidu were also getting quite creative, rolling out an array of products including a high-tech pillow called “Baidu HuHu” and an illuminated screen that allows people to project their search results onto other surfaces. Baidu’s efforts were especially impressive as they included promotional materials complete with photos, as well as prices, for the new bogus products.
Alibaba’s April 1 pranks came from its Aliyun cloud computing and Alipay e-commerce divisions, though the former was a bit too abstract for me to understand. Still, I have to credit the company for participating in the fun. Others who participated included Qihoo 360 (NYSE: QIHU), which rolled out a “smart necklace”, and Youku Tudou (NYSE: YOKU), that rolled out a super high-tech smart watch set to go on sale on the non-existent date of April 31.
Let’s close out this April Fool’s posting with the far more serious news from the taxi app realm, which has media reporting the merging Kuaidi and Didi are in talks for an investment that could sharply increase the new company’s valuation. The pair announced their intent to merge in February, and reports at the time said the combined company would have a market value of about $6 billion.
Now the latest reports say that Didi and Kuaidi, whose marriage is still pending, could see their value rise to the $8.75 billion figure with the new investment– a 45 percent jump from just a month ago. (Chinese article) It does seem a bit early for the company to be taking on new investors, since it has yet to close its merger. But such a high valuation wouldn’t surprise me at all, though I do think the new company will be looking at a rocky road for the next few years due to many regulator uncertainties.
Related posts:
