Alibaba suspended its acquisition of iQiyi, an extended video platform and a subsidiary of Baidu, as a result of lack of settlement on valuation. Tencent, which has been holding separate talks with Baidu, can be placing the plan on maintain.
It’s stated that ByteDance may additionally contemplate buying iQiyi, however as a result of aggressive relationship between Baidu and ByteDance within the digital promoting market, Baidu may not ponder promoting iQiyi to ByteDance.
It’s reported that Baidu’s valuation of iQiyi is US$20 billion. In response to different sources, iQiyi plans to boost a minimum of US$1 billion within the subsequent few months if a sale settlement can’t be reached.
In truth, as early as June this 12 months, there was information that Tencent was negotiating with iQiyi’s main shareholder Baidu, and deliberate to take a controlling stake in iQiyi to turn into the most important shareholder. Subsequently, Alibaba was stated to have joined the negotiation.
Folks acquainted with the matter stated that as a result of Tencent and Alibaba have their very own video streaming companies, they’ve been topic to strict antitrust evaluation, which has led to a impasse within the negotiation. The price given by Tencent is barely half of what Baidu desires.
In response to the aforementioned acquisition rumors, Tencent and Alibaba declined to remark, in response to media stories.
Baidu responded that the rumors had been unfaithful and stated that iQiyi is a crucial a part of Baidu’s content material technique, and Baidu will proceed to assist iQiyi’s growth. Bytedance additionally denied the rumors of wanting to accumulate iQiyi.
As well as, in August this 12 months, iQiyi was stated to look right into a second itemizing in Hong Kong, and is discussing associated potentialities with Credit score Suisse.
IQiyi went public within the U.S. in 2018 and has not but achieved profitability. The monetary report reveals that within the third quarter of this 12 months, iQiyi’s income was RMB7.2 billion yuan, a slight drop year-on-year, with a web lack of RMB1.2 billion yuan, in contrast with a web lack of RMB3.7 billion yuan in the identical interval final 12 months, narrowing year-on-year.
IQiyi stands at a crossroads. At current, the home long-form video market has three main gamers: Tencent Video, iQiyi and Youku. If Tencent and Alibaba take shares in iQiyi to exchange Baidu’s main shareholders, the lengthy video market shall be dominated by Tencent and Alibaba, forming a duopoly and dealing with regulatory strain.
A stake in iQiyi could make up for Bytedance’s weak point within the lengthy video area, however it’s unlikely to go forward as a result of aggressive relationship between Bytedance and Baidu.