Baidu Makes Impressive Gains for Second Straight Day After Announcing Purchase of PPS

Michael Teague |

Baidu, BIDU, chinese internet stocksChinese-language internet search service Baidu (BIDU) continued to gain on Tuesday as the company announced its acquisition of the Shanghai-based online video company PPS for $370 million.

Shares for Baidu closed yesterday up 3.7 percent to $87.65, and rose over 2 percent on Tuesday to as high as $89.88.

The acquisition is expected to be finalized during the current quarter, and is especially significant for Baidu as it allows the company a greater range of motion in its competition with China’s other dominant video site Youkou-Tudou. The company will integrate PPS into its own already-existing video service iQiyi, making it China’s largest video provider for mobile.



In terms of industry consolidation, the move harkens back to Google’s (GOOG) $1.65 billion 2006 acquisition of YouTube. It is also an echo of Baidu’s purchase of iQiyi which began as a joint investment between the former and Providence Equity Partners, and ended with Baidu’s buying-out of Providence’s stake late last year.

Youku-Tudou itself was created as a result of a merger last year, while the e-commerce company Alibaba just last week purchased a significant stake in the Twitter-esque service Weibo. Yahoo! (YHOO) owns 23 percent of Alibaba.

iQiyi CEO Gong Yu highlighted the “strong technology DNA” of both his company and Baidu, and went further to say that the move “lays a solid foundation for iQiyi to become a great technology company with strong media DNA as well.”

The acquisition is also a sign that Baidu, who went unchallenged for many years as the Chinese internet search engine, is feeling a certain amount of pressure from increasing competition. On Monday, Qihoo 360 Technology (QIHU) spiked some 8 percent to close the day at $37.30. Qihoo went public a little over 2 years ago, grabbing 10 percent of the market almost instantly.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
BIDU Baidu Inc. 169.79 0.86 0.51 2,059,211 Trade
QIHU Qihoo 360 Technology Co. Ltd. American Depositary n/a n/a n/a 0 Trade
GOOG Alphabet Inc. 820.92 1.41 0.17 1,620,717 Trade
YHOO Yahoo! Inc. 46.57 0.17 0.37 4,630,801 Trade
TLYS Tilly\'s Inc. 8.90 0.21 2.42 257,860 Trade

Comments

Emerging Growth

Blow & Drive Interlock Corp

Blow & Drive Interlock Corp manufactures, markets, leases, installs and monitors a Breath Alcohol Ignition Interlock Device mechanism on the steering column of an automobile and into which a driver…

Private Markets

Ozobot by Evollve Inc

Ozobot is a world leader in compact super intelligent robots that entertain and educate through fun interactive gaming.

Almond Smart Home Router by Securifi

Securifi sells user friendly touch screen routers that also have support for IoT/home automation.Securifi’s Almond revolutionized wireless router setup with its easy to use Touchscreen Interface in 2012. Now our…