Breakingviews – Baidu video sale hints at a China tech plot twist – Reuters

Men interact with a Baidu AI robot near the company logo at its headquarters in Beijing, China April 23, 2021. REUTERS/Florence Lo/File Photo GLOBAL BUSINESS WEEK AHEAD – RC2I1N94ZGA5

HONG KONG, June 16 (Reuters Breakingviews) – Big ticket mergers in China’s battered technology sector are overdue but a new twist has emerged. Search engine giant Baidu (9988.HK) may divest its 53% stake in iQIYI (IQ.O), a Netflix-like (NFLX.O) streaming service, in a mooted $7 billion deal per Reuters. read more It could attract an unconventional queue of bidders.

It makes sense for Baidu to sell now. It hasn’t been targeted by the official crackdown on technology companies so far, but that may be more a tacit recognition of its faded market clout than a compliment. Sales grew only 1% year-on-year in the three months to March after a relatively buoyant 2021, and iQIYI was the main drag. The unit’s revenue shrank 9% and paying members fell 4% over the period. Boss Robin Li probably prefers to…

Read Full Story: https://www.reuters.com/breakingviews/baidu-video-sale-hints-china-tech-plot-twist-2022-06-16/

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