China

Baidu Reportedly in Discussions to Acquire Toutiao.com

Summary:

  • Baidu (BIDU.NASDAQ) is reportedly in discussions with a view to acquiring Toutiao.com, a leading Chinese news aggregator, as reported by iheima.com.
  • Both companies have declined to comment. 

Why It Matters:

  • In 2016, Toutiao.com recorded RMB 8 billion in revenue and it had a valuation of US$ 10 billion. The revenue of the company is expected to increase more than 200% in 2017 to RMB 20 billion.
  • Among BAT companies (Baidu, Alibaba, and Tencent), Baidu has been falling behind competitively. Baidu is betting heavily on artificial intelligence (AI) and Toutiao.com can be a critical internet traffic hub for Baidu to implement its strategy.
  • However, the deal is proving hard to finalize. Last year, Tencent (0700.HK) planed to acquire Toutiao.com but failed. Zhang Yiming, the founder of Toutiao.com, has high ambitions and Baidu might have to offer a huge price for the acquisition.