Sohu merger pplive Deal or has been talked about collapse

Absrtact: PPS was acquired by Baidu, another similar to the PPS Internet video service provider PPLive has recently become the focus of the industry. In fact, PPLive CEO Tao and President Yao have told the New Express reporter, PPLive indeed with different potential acquirers

PPS after the acquisition of Baidu, another and PPS similar to the Internet video service provider PPLive has recently become the focus of the industry. In fact, PPLive CEO Tao and President Yao have been to the New Express reporter, PPLive indeed with the different potential buyers have many times the depth of the discussion, but has not yet reached a more definitive acquisition intention. And the negotiations between the two sides of the controversy, is the acquisition of "price" problem, especially in the PPS by Baidu to 370 million U.S. dollars after the acquisition, PPLive's value also can be referenced from. In the current rumors of "Sohu Video acquisition PPLive", bargaining is still pplive the focus of the shot. However, the reporter learned that, following the May 21 Sohu boss Charles Zhang responded "has not reached any agreement with PPLive", there is news that PPLive is interviewing new investors, and its negotiations with Sohu because the price problem has no results.

Change the drama into revenue 800 million revenue false high?

According to Pptvceo Tao disclosed that 2012 pplive revenue of 800 million yuan, the fourth quarter to achieve break-even, 2013, there is hope to strive for the year break-even. However, some investors in the investment sector have analysed the reporter in fact, Tao Chuang announced 800 million yuan revenue, about 360 million yuan income is from the copyright replacement and copyright line amortization, and linear amortization method because of its lack of rigor and can only do high short-term report adverse long-term revenue, not recognized by investors. Sohu and PPLive in the process of negotiations, the latter will be the conversion of copyright replacement content into the market price into the revenue of the practice has not been recognized by Sohu. This means that in the eyes of potential buyers, pplive is not as valuable as its CEO Tao described.

A video industry person to write a account to reporters: PPLive in early 2011 to obtain soft silver 250 million U.S. dollars in financing, a year to invest a lot of money for copyright procurement and marketing and scale expansion, of which about 1 billion yuan for the purchase of mainland TV dramas, TVB Hong Kong drama, Taiwan variety show, Korean dramas and the English Premier League sports live content, most of which is exclusive copyright. By the beginning of 2012, PPLive's book Capital had only less than 30 million dollars, and subsequently tightened copyright costs, relying on the existing copyright distribution and replacement for content Library updates. And the replacement of the copyright content discounted into the revenue of the practice, is not the industry's common. If the revenue is calculated according to the mainstream of the video industry, the annual income of PPLive is only 440 million yuan, which is far from the 800 million Yuan Tao claimed.

Valuation seesaw: 200 million dollars or 700 million dollars?

The value of PPLive's valuation has also aroused concern in the industry. According to people close to the Sohu and pplive trading talks, PPLive's current valuation is 600 million U.S. dollars, slightly lower than the Tao disclosed earlier, but this level of valuation still cannot make Sohu nod. Interestingly, when Baidu finalized a 370 million-dollar acquisition of PPS, PPLive President Yao to reporters that the valuation of the PPS is at least twice times the price, 370 million U.S. dollar transaction prices are "sale." However, Archie Art CEO Gong on another occasion to reporters that pplive on the PPS deal behind the comments for their own bidding motives, and PPS founder Xu Wei to reporters confirmed that PPS after four rounds of financing of tens of millions of U.S. dollars, the meaning of the 370 million dollar transaction price is reasonable.

People familiar with the matter said Sohu's first offer to PPLive was 200 million dollars. The reasons for the offer are two points: first, SoftBank's $200 million trillion investment is spent on exclusive copyright purchases, and 2011-2012 comes at the peak of the domestic copyright price bubble, which is extremely inefficient and cannot be used as a basis for pplive valuations. Second, the real revenue of PPLive in 2012 is only 440 million yuan, at the same time, currently carrying a loan of nearly 200 million yuan.

On the current situation of pplive negotiations, PPLive told reporters that there is no official caliber can be open to outsiders, all can only wait to see.