Bottom PPLive: The possibility of commitment to Sohu

"As people in the same industry and in the circle, there must be some food and chat," he said. "About Sohu Contact purchase pplive Rumors, cohesion Media (hereinafter referred to as" PPLive ") chief executive Tao May 9 in the interview with this reporter first response to this question, said:" But other capital level rumors, we do not have more information to disclose. " PPLive is open to many possibilities in the future, we will make an independent IPO and may seek strategic investors. ”

On this day, PPLive held a press conference in Shanghai, launched the "The One" mobile strategy, and with the number of China released a "Ppbox" smart TV set-top box.

Tao also disclosed to reporters the financial situation of PPLive: PPLive last year's comprehensive income of 800 million yuan, last year four quarter has been breakeven, this year is expected to achieve a full year break-even.

Without new investment, would such financial conditions support PPLive's long-term independent survival?

"The possibility of being bought by Sohu exists. "Wu, a senior TMT researcher who has been engaged in the TMT industry, said:" First, the Nasdaq channel has been closed for a long time; second, Nasdaq already has two companies that are listed in the video concept and are merging; again, it is hard to pplive to return to a shares.

"If it's not for sale, it's hard to pplive a separate IPO in the current situation," Wu that selling himself to a Nasdaq-listed company is an ideal choice. PPS acquisition price of 380 million U.S. dollars, taking into account the PPS has been carrying profits, Wu to PPLive's valuation of its last year's income twice times, that is, about 1.6 billion yuan. That was a big gap in the valuation of SoftBank's $700 million trillion pplive in February 2011, shrinking nearly 2/3.

May 13, reporters from a close to pplive sources learned that pplive may be in a dilemma, because in 2011 when the entire video industry shocked soft silver pplive, the two sides may have a harsh gambling agreement. "This will determine that pplive may not accept the olive branch of Sohu, but can only choose the IPO path." "Investors are under a lot of pressure on pplive, which is even more than PPS," said the source. ”

The news had not been confirmed by PPLive.

The value of merger and acquisition of PPLive

Outgoing pplive or possible sale of news at the end of March this year. There are investors in the industry, PPLive recently with Sohu, Tencent, Baidu and other companies to engage in order to seek sales or mergers and acquisitions. And since the acquisition of PPS from Baidu, Sohu became PPLive's biggest gossip buyer.

Sohu's acquisition of video demand is very large, repeated rumors that it had close contact with the Thunderbolt, PPS and other companies. "Sohu has always had this intention, in fact, has been waiting for a good time." "said Zhang Yi, analyst at the Analysys think-tank.

Now, it seems to be a good time.

"First of all, like PPLive, Thunder and other second echelon of the video companies experienced at the end of 2011 and 2012 in the bandwidth, copyrights and products, and many other areas of all-round competition, the current urgent need for financing." Second, no good investors are entering the market. So it will certainly affect the valuations of these companies. "Zhang Yi said.

Wu points out that mergers need to consider what the buyer's needs are, that is, the value added.

"For example, Baidu acquisition of PPS, Baidu's advertising is strong, but it lacks the game, and PPS actually nearly 60% of the income from the game." "Wu pointed out:" and Sohu video advertising is not strong, but also lack the advantages of the client, but PPLive ads do a good job, whether in the PC or mobile end also happens to have client advantages. ”

PPS and PPLive are two video companies known for their clients. "But in fact, PPLive is the most profitable in the client market. "Zhang Yi added, this is pplive a very big advantage.

And PPLive is one of the earliest video companies to enter the mobile-end layout. According to the data provided by PPLive: The total number of mobile clients installed over 140 million, mobile terminal traffic accounted for the total flow of 30%. By the end of last December, PPLive Mobile end of the monthly active user breakthrough 50 million. And according to the newly released video web site coverage Mobile User Statistics Report: pplive Weekly coverage of 14.3666 million users, ranking industry first.

Tao also revealed in an interview with the press conference, the current mobile-side video advertising development than the industry's expected optimism. "Previously thought that the mobile end is difficult to monetization, but in the pad side advertisers accept quickly, and very big, unit price average is 2-3 times the PC, the highest to 4-5 times." "Tao said.

In other words, Tao that the monetization of the mobile end is just beginning. The same data from PPLive: PPLive advertising revenue from mobile terminals in the first quarter of this year has exceeded 2012.

With soft silver or have a bet on the deal?

However, if the agreement with SoftBank is really there, it will probably prevent pplive and Sohu from marrying.

Public information shows that PPLive has received a total of 5 rounds of financing: The beginning of 2005 to obtain soft silver 2 million U.S. dollars Seed Fund, 2006 access to Blue Venture investment, soft silver participation of millions of U.S. dollars invested in September 2007 to obtain DFJ and Dragon Pulse investment of 21 million U.S. dollars. 2010, PPLive received the fourth round of financing, investors and the details of the funds are unknown;

In February 2011, PPLive received $250 million trillion in soft silver, valued at $700 million trillion. According to the reporter understands, soft Silver's huge financing involves a certain share exchange, the original investor although did not completely sell the stock, but if DFJ such investment institution has a certain proportion of shares exit.

SoftBank's huge capital injection has made pplive one of the highest-margin companies in the video industry in China.

According to Media Records, pplive This historic financing valuation also benefited from Youku's market capitalisation after the more than 3 billion dollar driving effect, so that its valuation steep 4 times times climbed to more than 700 million U.S. dollars, and the recognition of this valuation is-like gambling, extremely optimistic about the network of soft Silver Group Chairman son.

The news has caused a stir in the video industry, because five months ago, in September 2010, PPLive also disclosed that it was carrying out a round of tens of millions of dollars in financing, but five months later, financing as high as 250 million U.S. dollars. It is said that at the PPLive financing press conference, PPLive management is excited.

And Tao also disclosed that he and son on the financing to meet some of the stories. December 24, 2010, son came to Shanghai, in the soft silver China Executive partner Xue Cun Wo under the coordination, Tao Chuang has 10 minutes to son introduced PPLive, because the traffic jam was late 3 minutes, the remaining 7 minutes only spoke 5 minutes, the laptop computer is dead, but son very interested, A few days later, the two sides will meet again in the SoftBank Tokyo office.

In the end, SoftBank won the pptv35% stake at 250 million dollars.

However, according to the above sources to the reporter said: its time, soft silver and pplive between the possibility of a gambling agreement. This is similar to the harsh nature of the betting agreement: SoftBank gives PPLive a high valuation, but at the same time, SoftBank also sets pplive time to market, and if pplive fails to meet this expectation, SoftBank will get very big benefits such as greater stock ratios.

"The situation that this pplive faces may be: first, complete the agreement; second, the two sides through negotiations to extend the agreement time, soft silver at the same time further gain a certain interest; third, soft silver may also be set up, the shares sold to Sohu. ”

"Now is the video industry shuffle time, the current pplive still have the dominant power, but further down, the dominant power may turn to SoftBank." "The source said.

The box is hard to raise valuations

May 9 PPLive released mobile new strategy and TV set-top box "ppbox", meaning that its multi-point layout strategy officially from the mobile end to the TV screen.

According to PPLive vice president, multiple Terminal Division general Manager Tanxiaore revealed that for the launch of the PPBOX,PPTV has been prepared for two years. Ppbox overall hardware from design to production by the PPLive itself, team hardware talent has been formed a few years ago.

PPLive The current business model is mainly divided into two types: one is advertising, accounting for 70% of its total income, others for value-added charges, including cooperation with the electrical business, game companies, such as joint operations games. PPLive Interior also operates a special virtual coin system "p-coins."

Yao, founder and president of PPLive, stressed: "PPLive the launch of the box does not mean that the transition from an Internet company to a hardware company." First of all, PPLive also with the millet box and other cooperation to output content, content is pplive core advantage; second, pplive dedicated content, but the content needs more output, set-top box is just a platform and channel, PPLive hope to occupy the living room.

Tao that TV users are the biggest contributors to the income per capita. If the indicator, a few screen value is the largest television, followed by the tablet, again is the mobile phone, the PC ranked fourth.

PPLive currently has a large PC-side user, he says, but the PC side of the future may remind users to look at the TV. "The future may be free for PCs, but the living room TV will probably pay one or two bucks." "Tao that the charge is not a big problem, an account all through, with a mobile phone to pay, and then directly to the television."

But a lot of outside analysis thinks, the launch box is merely pplive raise own valuation. "PPLive to make boxes, enter the living room for it has a certain value, but at this stage is just a concept." "Wu thinks.

Zhang Yi said: "This may help pplive to raise valuations, but the box now has no market for advertising volume, user volume, so there is no comparability." ”

"In terms of financial size and business revenue growth, pplive valuations should actually be higher than PPS." "Zhang Yi that the two users of the same scale, but with PPS advertisers mostly for small and medium-sized Enterprises, pplive to brand advertising, the current video advertising market demand is still very strong, so pplive advertising revenue potential is large."

"But on the other hand, its advertising model also decided to compete with the market, the expansion phase can not compress costs, which led to pplive profitability, at this point in time, and faced with the acquisition negotiations, PPLive's book situation will seriously affect its valuation." "Zhang Yi said.