10 Updates

Tencent Ties Up With Korean Gamer, Eyes Youku Tudou

Mar 28 2014, 8:46pm CDT | by

Internet leader Tencent (HKEx: 700) has just announced a major purchase involving a Korean game maker, in what would normally be leading news on the Chinese Internet. But instead, the company is...

Filed under: news

 
 
 

16 weeks ago

Tencent Ties Up With Korean Gamer, Eyes Youku Tudou

Mar 28 2014, 8:46pm CDT | by

Internet leader Tencent (HKEx: 700) has just announced a major purchase involving a Korean game maker, in what would normally be leading news on the Chinese Internet. But instead, the company is making bigger headlines on talk that it’s nearing a deal to buy 20 percent of leading online video firm Youku Tudou (NYSE: YOKU) for a smaller amount. The 2 deals collectively would be worth about $1 billion, which these days doesn’t seem like big news anymore for China’s rapidly consolidating Internet.

These latest 2 deals reaffirm Tencent’s strategy of buying major strategic stakes in other companies without taking full control. The confirmed deal will see China’s largest Internet company pay $500 million for 28 percent of South Korea’s CJ Games, which will help Tencent maintain its edge in its core online game business. (company announcement ) But the bigger headlines are going to another deal that would see Tencent buy the 20 percent Youku Tudou stake for around $300 million. (English article ; Chinese article )

Let’s quickly review these 2 deals, starting with CJ Games. The Korean company will sell its stake through the issue of new shares, giving Tencent access to its portfolio of online and mobile games. The deal looks similar to another one that Tencent did last year, which saw it participate in a management-led buy-out of leading global game maker Activision Blizzard from its French owner Vivendi (Paris: VIV). (previous post )

These kinds of stake purchases look rather smart, as they give Tencent preferred access to the games developed by its strategic partners, who otherwise might prefer to sell to Tencent’s Chinese rivals. One of Activision Blizzard’s most popular franchises, the World of Warcraft series, is currently licensed in China by NetEase (Nasdaq: NTES), the country’s second biggest game operator. But I previously predicted that following its Tencent tie-up, Activision could decide to move the title to Tencent once NetEase’s current license expires.

Next let’s look at the Youku Tudou deal, which has Chinese media buzzing because it involves the nation’s leading online video company. Most of China’s biggest online video sites have been acquired by bigger companies over the last year after realizing they couldn’t survive on their own. But Youku Tudou has resisted that trend, remaining independent up until now.

Youku Tudou’s CEO Victor Koo said as recently as last week that he wouldn’t sell his firm but could consider a strategic partner, and now that looks like what could soon happen. Media are citing a wide range of sources, all of them anonymous, saying the two sides have struck a deal and a formal announcement could come soon. The deal would see Tencent get the 20 percent of Youku Tudou, and the 2 companies then combine their video assets.

This kind of deal looks quite similar to another one that Tencent announced earlier this month, when it said it would pay cash and inject its own e-commerce assets into JD.com in exchange for 15 percent of the country’s second biggest e-commerce company. (previous post ) In that case and now with Youku Tudou, Tencent seemed to get its stakes at a relatively big discount, reflecting the value of the connections it can offer to both of these smaller companies.

From a broader perspective, these 3 recent deals and similar earlier ones all seem to show that Tencent prefers to keep its focus on its core gaming and social networking (SNS) businesses, and form equity tie-ups with strategic partners in other areas. This looks like a good strategy to me, as it allows the company to stay focused on what it does best while also reaping benefits from businesses like e-commerce and video. Of course not all such tie-ups always work, as evidenced by the failed partnership between Yahoo (Nasdaq: YHOO) and e-commerce leader Alibaba. But if they don’t work, then Tencent can easily sell out its stake the same way Yahoo is doing now.

Bottom line: Tencent’s 2 latest purchases reflect its M&A approach of taking big stakes in strategic partners, in a bid to find new business opportunities while focusing on its core strengths.

Doug Young is a former China company news chief for Reuters who teaches financial journalism at Fudan University in Shanghai. To read more of his commentaries on China tech news, click on www.youngchinabiz.com .

Source: Forbes Business

 
Update
10

6 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

Cambodia's Famous Battambang Circus
KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Rakyat was to ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

6 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

Australia A v CA NPS
KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was br ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

6 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

The Prince Of Wales Visits The Royal International Air Tattoo
KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by the Dewa ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

6 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Datuk Seri Hishammuddin Hu ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

6 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

INDIA-CHINA-DIPLOMACY-TRADE
PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Se ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

6 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

Government Weekly Cabinet Meeting
KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 million in co ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

6 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri Mustapa Moha ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

6 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

Iskandar Johor Open - Previews
JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an allocati ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

6 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

EurAsia Cup presented by DRB-HICOM - Day One
PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar S ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

6 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara Damansara Skyway (K ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

'Simulated' human heart created for better drug testing
London, July 22 (IANS) In pioneering research, a scientist has developed a 'simulated' human heart to test the effect of drugs on the heart without using human or animal trials.
 
 
Daily probiotics may regulate blood pressure
Sydney, July 22 (IANS) Probiotics found in yogurt, fermented and sour milk, cheese and dietary supplements not only improve the functioning of your gut but can also help lower high blood pressure.
 
 
Heart attacks kill younger women faster than men: Study
New York, July 22 (IANS) Aakriti Gupta, an Indian-origin researcher at the Yale School of Medicine, has found that women have longer hospital stays and are more likely than men to die in the hospital after a heart attack.
 
 
Facing memory lapses? Catch some sleep
New York, July 22 (IANS) Missing sleep lately owing to family stress or extra workload at office? Get back to normal routine fast as lack of sleep can hurt your memory.
 
 
 

Latest from the Network

Kenya coach suspended for spitting at match official
Nairobi, July 22 (IANS) Confederation of African Football (CAF) has slapped a one-year suspension on Kenya's head coach Adel Amrouche for his undisciplined behaviour against a match official. In a letter to the...
Read more on Sport Balla
 
Heart attacks kill younger women faster than men: Study
New York, July 22 (IANS) Aakriti Gupta, an Indian-origin researcher at the Yale School of Medicine, has found that women have longer hospital stays and are more likely than men to die in the hospital after a heart...
Read more on Business Balla
 
Idris Elba in talks to join Guy Ritchie's King Arthur
Idris Elba is in talks to join the cast of 'King Arthur'. The 41-year-old actor is believed to have entered into negotiations with Warner Bros to play a wizard-like figure and mentor to Arthur in the retelling of the...
Read more on Movie Balla
 
Former Dominican cricketer dies in road accident
Roseu (Dominica), July 22 (IANS/CMC) Dominica's former national cricketer Gifford Walsh has died in an accident here. Walsh was driving a vehicle in a southerly direction Saturday when it collided with another vehicle...
Read more on Sport Balla
 
Australia sends plane to bring back MH17 victims
Canberra, July 22 (IANS) Australia Tuesday sent a C-17 military plane to the Netherlands to bring back the victims of the Malaysia Airlines flight MH17 which crashed in Ukraine last Thursday. The heavy-lift transport...
Read more on Politics Balla
 
Facing memory lapses? Catch some sleep
New York, July 22 (IANS) Missing sleep lately owing to family stress or extra workload at office? Get back to normal routine fast as lack of sleep can hurt your memory. A study has found that memory distortion is...
Read more on Apple Balla
 
Mexican posts murder confession on Facebook, held
Mexico City, July 22 (IANS/EFE) A man was arrested in the northern Mexican state of Nuevo Leon after he confessed to murdering his fiance's mother in a Facebook post, officials said. Roberto Alejandro Santos, 32, was...
Read more on Politics Balla
 
Kenya's Kipketer pursues World Junior glory
Nairobi, July 22 (IANS) The moment of reckoning for Kenya's Alfred Kipketer comes Friday when he lines-up for the heats of the men 800m at the 10th IAAF World Junior Championships in Eugene, Oregon. Kipketer, 17, is...
Read more on Sport Balla
 
Kenya marathoner Ongori ruled out of CWG
Nairobi, July 22 (IANS) The Kenyan women's marathon team for the Commonwealth Games in Glasgow suffered a blow when Birmingham World Half silver medallist Philes Ongori was forced out of the squad with an injury....
Read more on Sport Balla
 
Asian Games: Kazakh weightlifters eye three gold medals
Almaty (Kazakhstan), July 22 (IANS) Alexey Ni, head coach of the national weightlifting team of Kazakhstan, has said his team aim to win three gold medals at the Asian Games this year in Incheon, South Korea. Alexey...
Read more on Sport Balla