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…
Just a half year after pooling their online search assets, leading web firm Tencent (HKEx: 700) and the much smaller Sohu (Nasdaq: SOHU) are reportedly in talks to also merge their video businesses amid a broader wave of consolidation sweeping China’s Internet. I have some doubts about whether this new deal will happen for reasons I’ll explain shortly, though I’m far less skeptical now than I would have been at this time a year ago. If such a deal does happen, it could mark the latest step in what could become Tencent’s eventual acquisition of Sohu, one of China’s oldest Internet companies. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 1-3. To view a full article or story, click on the link next to the headline.
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Sohu (Nasdaq: SOHU), Tencent (HKEx: 700) Plan Video Business Merger – Source (English article)
JD.com Suffers Data Breach, Says Scale Not Large (Chinese article)
Gap’s (NYSE: GPS) Old Navy Chain Opens First Store in Mainland China (Businesswire)
SMIC (HKEx: 981) Sets Up 500 Mln Yuan Investment Fund (HKEx announcement)
An Independent Suntech (OTC: STPFQ) Sets its Sights On The UK Solar Market (PRNewswire)
Search leader Baidu (Nasdaq: BIDU) may be rapidly yielding market share to 2 up-and-coming rivals, even as its latest results show it’s still king of the hill when it comes to getting revenue from online advertisers. But the company is still searching for new innovation, with word that charismatic Xiaomi co-founder Lei Jun came to speak at an internal event this week as Baidu seeks to rekindle its own “wolf spirit”. Baidu’s quest to become more diversified and has moved into high gear with a spree of major acquisitions over the last year in a wide range of areas. Still, its latest results, while impressive, show just how heavily dependent the company remains on online advertisers. Read Full Post…
We’re getting a better picture of the latest online advertising trends with the recent release of earnings from 3 leading web portals, revealing a looming slowdown for names like Sina (Nasdaq: SINA), Sohu (Nasdaq: SOHU) and Phoenix New Media (NYSE: FENG). Sina and Sohu could offset the slowdown through growth in their newer businesses, which includes Sina’s Weibo microblogging service and Sohu’s search and video services. But everyone could also face more challenges from newcomers like Qihoo 360 (NYSE: QIHU), which is under intense pressure to start monetizing its highly-hyped and fast growing So.com search service. Read Full Post…
The latest earnings season for US-listed Chinese Internet firms has begun with a big yawn, hinting at a looming wave of investor fatigue after a surge in positive sentiment at the end of 2013. I’ve been writing about these companies for quite a while now, and can truthfully say it’s quite common to see their stocks rise or fall by 3 percent or more after they announce their quarterly results. It’s much rarer for shares to remain unchanged after such announcements, though that’s largely what has happened after web portal Sohu (Nasdaq: SOHU) and online real estate services firm Soufun (NYSE: SFUN) kicked off the latest earnings season with release of their fourth-quarter results. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 11. To view a full article or story, click on the link next to the headline.
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Alibaba Offers $1.6 Bln For Digital Mapping Firm AutoNavi (Nasdaq: AMAP) (English article)
China’s Dongfeng (HKEx: 489) Says Held Talks With Peugeot, No Deal Yet (English article)
It’s quiet outside as markets reopen on this first work day after the New Year, so I thought I’d start off 2014 with some predictions for the year ahead in the sectors that I cover. Generally speaking, I do think the first half of the year will see a continuation of strong momentum that began in late 2013 for many sectors. But that momentum will slow as we near the mid-year mark, and 2014 could end with a whimper as the Chinese economy continues to slow and Beijing pushes for higher quality growth. Read Full Post…
Top officials from leading cellphone chip maker Qualcomm (Nasdaq: QCOM) and web portal Sohu (Nasdaq: SOHU) were tweeting away on their microblogs last week, in what look like efforts to counter recent negative developments for both. In the former case, one of Qualcomm’s China vice presidents, Shen Jin, was hyping the potential of both 3G and 4G in China, just as his CEO was admitting that Qualcomm has come under pressure in the market due to negative fallout from the recent Edward Snowden spying scandal. Meantime, Sohu founder Charles Zhang was talking about the importance of copyright protection, in what looks like a response to criticism of selfish motives behind Sohu’s role as a lead plaintiff in a recent copyright infringement lawsuit against online search leader Baidu (Nasdaq: BIDU). Read Full Post…
Baidu reportedly near deal to buy Zongheng literature site
Internet stalwarts Baidu (Nasdaq: BIDU) and Sohu (Nasdaq: SOHU) are back in the M&A headlines with news of relatively small acquisitions, indicating the market may be running out of big targets as we prepare to end a landmark year for major deals in China. I’ve been reporting on Chinese Internet companies for more than a decade, and during most of that time would be lucky to see 1 or 2 major acquisitions or equity tie-ups in any single year. But all that changed this year, with top Internet names like Baidu, Alibaba and Tencent (HKEx: 700) emerging as major buyers in a series of deals collectively valued at billions of dollars. Read Full Post…
Former social networking (SNS) superstar Renren (NYSE: RENN) is reportedly downsizing its online game division, formerly its most promising unit, leading me to wonder if earlier rumors that the company’s days as an independent entity may be numbered. The story behind Renren’s rapid rise and now apparent fall is simple: The company was once considered China’s equivalent of Facebook (Nasdaq: FB), and used that comparison to launch a successful IPO back in 2011. But since then it has been overtaken by other social networking services, most notably Sina’s (Nasdaq: SINA) Weibo microblogging service and Tencent’s (HKEx: 700) WeChat, putting the company’s future in jeopardy as it looks for a competitive advantage. Read Full Post…
