Baidu, the Chinese language Internet search provider, is buying the online video business of Internet video provider PPS for $370 million to create China’s largest online video platform by number of mobile users and video viewing time.
Baidu and PPS expect the transaction to close in the second quarter of 2013, subject to customary closing conditions. Upon completion of the transaction, the PPS online video business will be consolidated into Baidu’s financial statements. PPS’s online video business will be merged with Baidu’s own video platform iQiyi. The combined entity will continue to operate as a sub-brand of iQiyi.
iQiyi CEO Gong Yu described the merger of iQiyi and PPS’s online video business as “a major step” toward consolidation in the industry which would contribute to the development of China’s Internet video industry. “The merger will generate significant synergies, and will provide for an improved user experience as well as more and better content. It will also deliver better marketing value and a wider range of options for advertisers. The merger of iQiyi and PPS – both companies with strong technology DNA – lays a solid foundation for iQiyi to become a great technology company with strong media DNA as well,” he stated.
PPS founder and Chairman Zhang Hongyu noted that as a leading Chinese online video brand with an eight year history, PPS had the opportunity to join with iQiyi in opening up future markets, and was excited to be working together to reshape the industry. “We will strive to maximise the value of our combined resources and integrated teams, and we will jointly contribute to the progress and maturation of China’s video industry,” he declared.
After the acquisition, Gong Yu will continue to be CEO of iQiyi. Zhang Hongyu and PPS president Xu Weifeng will serve as co-presidents at iQiyi, and will be in charge of the PPS sub-brand and new business development.