Baidu's Live Streaming Ambitions Dashed as $36 Billion Joyy Deal Falls Through
Baidu's live streaming ambitions in China hit a setback as its $36 billion Joyy deal falls through, hampering the tech giant's efforts to diversify revenue and expand its presence in the competitive market
Baidu's attempt to grow its live streaming business in China and broaden its sources of income has been setback by the failure of a proposed $3.6 billion acquisition. On Monday, the Chinese tech company revealed that one of its affiliate firms had ended a 2020 deal with Nasdaq-listed Joyy (YY), the operator of the well-liked live streaming platform YY Live.
The agreement collapsed due to unmet conditions by the December 31 deadline, as stated by Baidu (BIDU) in a Monday filing with the Hong Kong Stock Exchange. This included the failure to obtain the required regulatory approvals. Joyy, in a statement, confirmed receiving a notice from Baidu's affiliate asserting the right to cancel the transaction. The live streaming company, with approximately 277 million active monthly users worldwide, expressed its intention of seeking legal counsel.
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Baidu, the leading search engine in China, revealed in November 2020 its plans to purchase YY Live in order to increase its revenue streams beyond advertising. The company anticipated that the acquisition would be finalized in the first half of 2021. CEO Robin Li stated that the deal would propel Baidu into a leading live streaming platform and broaden its sources of income.
YY Live, similar to other live streaming platforms in China, generates revenue from users purchasing virtual gifts for performers. Joyy's net revenues for the third quarter of 2023 were reported at $567.1 million, a decrease from the $586.7 million generated in the same period the year before. Revenues from live streaming also saw a decline of nearly 9%, amounting to $495.8 million.
In late 2020, the Chinese government began to crack down on what it deemed as excessively powerful companies, particularly targeting Big Tech. However, with China's economic situation worsening, Beijing has displayed indications of relaxing the crackdown, often emphasizing the role of tech companies in the economy.
