Anti-monopoly regulator may need to brandish veto stamp
After years of fragmentation, China’s Internet has undergone a sudden and radical overhaul over the past year, with 3 major firms emerging as major consolidators. The frenzy of new tie-ups and acquisitions has been a welcome development, helping to cool overheated competition in a wide array of sectors where most companies were losing money.
But with the emergence of Alibaba, Tencent (HKEx: 700) and Baidu (Nasdaq: BIDU) as the 3 major consolidators, China’s anti-monopoly regulator should start to give closer scrutiny to future deals to avoid too much reduction in the competition necessary to ensure future innovation and consumer choice. Such scrutiny could and should ultimately lead to the veto of some future deals, especially larger ones, by regulators who need to become more assertive in the space. Read Full Post…
Less than 2 months after hiring a top executive to head its new push into China, professional networking leader LinkedIn (NYSE: LNKD) has come out with a series of announcements on the new launch of a Chinese-language edition for its service, and also some figures for the size of its addressable market in China. The company has also rolled out its official Chinese name, Lingying, which translates roughly to “Leading Hero”, perhaps encapsulating how it hopes to position itself in the market. And in a nod to the challenges it will face, its CEO Jeff Weiner has also put out a separate lower-profile announcement detailing how the company plans to handle sensitive issues involving China’s strict censorship policies. Read Full Post…
Executives from smartphone sensation Xiaomi were playing their usual marketing tricks in the microblogging realm this past week, trumpeting an online promotion in the run-up to a more formal launch next month in Singapore, the first stop on the company’s global expansion. Meantime, US professional networking giant LinkedIn (NYSE: LNKD) was moving more quietly in the other direction into China, where its recently hired top executive was tweeting about his ongoing hiring efforts as the company builds up a local operation. Read Full Post…
I haven’t written about Facebook (Nasdaq: FB) in a while, mostly because the company hasn’t made any concrete moves into China lately despite previous assertions that it would like to enter the market. But the company’s newly announced plan to purchase the popular WhatsApp mobile messaging service for up to $19 billion looks like a good opportunity to revisit the topic, and what this deal might mean for Facebook in China. Facebook’s own site has been blocked in China since 2009, making it inaccessible to the vast majority of more than 600 million Chinese web surfers. But WhatsApp is widely available, even though it competes with the wildly popular rival WeChat service from local Internet giant Tencent. (HKEx: 700)
The final death knell for one of China’s oldest software developers is casting a spotlight on just how difficult it is for companies to break into the global market for computer operating systems (OS). The end for Red Flag Software also bodes poorly for a number of more recent Chinese initiatives to create a mobile OS to rival Google’s (Nasdaq: GOOG) wildly popular Android and Apple’s (Nasdaq: APPL) own iOS. No specific reasons were given in the reports for Red Flag Software’s final demise, though I suspect defections by the company’s core state-run customers and a broader decline in the traditional desktop PC market were both factors. Read Full Post…
China was closed for much of last week, but that didn’t some of its top tech executives from emitting a steady stream of tweets on their microblogs regaling followers with tales of their travels over the Lunar New Year holiday. The US emerged as the travel destination of choice for many who favored a destination that has been quite generous towards their sector over the last few months.
Regular tech readers will know I’m talking about the huge success of 5 major Chinese Internet IPOs in New York, many of which have nearly doubled in value since their trading debuts in the last 2 months of 2013. Executives at JD.com, China’s second largest e-commerce company, are hoping to ride that wave of positive sentiment with another New York IPO this year. That pending deal saw one JD.com executive complain of having to take part in a late-night teleconference during the Lunar New Year holiday that I suspect was connected to that upcoming listing. Read Full Post…
Lenovo shares to come under pressure for next 2 years
Media have been buzzing these last few days about a Hong Kong stock exchange filing revealing that Google (Nasdaq: GOOG) has acquired 6 percent of Chinese PC giant Lenovo (HKEx: 992), implying the deal represents a vote of confidence by the world’s biggest Internet company in the world’s top PC seller. But anyone with any memory will recall that the transaction is just part of Lenovo’s payment for its recent purchase of Google’s Motorola cellphone division. What’s more, Google is almost certain to dump the stock once a lock-up period ends, putting pressure on Lenovo’s stock until that date arrives. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 8-10. To view a full article or story, click on the link next to the headline.
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Alcatel (Paris: ALUA) In Talks To Sell Phone Unit To Chinese Investment Firm Huaxin (English article)
MIIT Says New VNOs Banned From Building Telecoms Infrastructure (Chinese article)
Update: Shortly after writing this post, Sony has announced it will sell its Vaio unit to investment firm Japan Industrial Partners (JIP). I still believe that JIP could ultimately bring in Lenovo to help it operate the unit in a new joint venture or other tie-up.
Let’s begin my first post in the Year of the Horse with a look at PC giant Lenovo (HKEx: 992), which has suddenly gone into M&A overdrive with the latest word that it may be in talks to acquire Sony’s (Tokyo: 6753) PC business. I wrote just before the holiday that Lenovo might already be taking on too much with its $2.9 billion purchase of cellphone maker Motorola, which came late last month just a week after its $2.3 billion purchase of IBM’s (NYSE: IBM) low-end server business. (previous post) Individually each of these 3 deals actually look relatively smart, as all complement Lenovo’s existing businesses. But a single major acquisition is always tricky even in the best circumstances, and handling 3 such deals at the same time looks to me like a recipe for trouble. Read Full Post…
I commented last week that Lenovo (HKEx: 992) Chairman Yang Yuanqing didn’t seem extremely enthusiastic about his landmark deal to buy IBM’s (NYSE: IBM) low-end server business, and now perhaps we know why. It seems that as Yang was discussing that deal, the largest ever for Lenovo at the time, he was close to finalizing an even bigger purchase of Motorola, the faded former cellphone titan that was purchased by Google (Nasdaq: GOOG) in 2012. Lenovo is paying $2.9 billion for Motorola, a lofty price but still much less than the $12.5 billion Google paid just 2 years ago. That indicates to me that the company Lenovo is buying is probably just a shell of the Motorola that Google purchased, making the deal look somewhat questionable. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 30. To view a full article or story, click on the link next to the headline.
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Lenovo (HKEx: (992) To Buy Google’s Motorola In China’s Largest Tech Deal (English article)
ICBC (HKEx: 1398) To Buy Control Of Standard Bank Unit For $765 Mln (English article)
500.com (NYSE: WBAI), China Mobile (HKEx: 941) In Strategic Partnership (PRNewswire)
MIIT Gives 2nd Round Of VNO Licenses, Winners Include Suning, Gome (Chinese article)
Buffett-Backed Chinese Automaker BYD (HKEx: 1211) Settles US Wage Dispute (English article)
