Following Youku’s acquisition of Tudou.com happend last year, the Chinese online video industry will soon have another blockbuster deal.
Tencent Technology get to learn that Baidu has basically completed the acquisition of Shanghai Public Source Network (PPS), the transaction value is nearly US $400 million. Insiders confirmed this news to Tencent Technology and it is believed that the related news will be officially announced soon. Baidu will report its earnings in the early morning of April 26, whether it will disclose details of the acquisition of PPS is widely concerned.
Baidu now has online video site iQIYI.COM. It is understood that after Baidu’s acquisition of PPS, iQIYI.COM will be responsible for the integration of the business of the two websites and the new company will still be called the “iQIYI” take and a dual-brand strategy will be adopted.
It is understood that the senior management of PPS is already making internal low-key diffusion of the message about Baidu’s acquisition of PPS. An executive wrote to employees in a SMS that: “tell you a good news, we will soon have a strong background, with the wisdom of you all, you will be able to create greater value in the new environment!” Insiders of PPS confirmed that “background” was referred as Baidu.
Baidu acquisition of PPS will further accelerate the integration of the online video industry. With iQIYI.com’s acquisition with PPS, it will become the second largest video company in term of traffic and revenue, the estimated total revenue of the two website in 2012 will be over 1 billion yuan (USD 160 million), but still after the combination of Youku.com and Tudou.com. The new iQIYI.com after the coming acquisition will raise challenge to these two online video platforms.