Who will be the next merger

In 2013, China's Internet entered the M & A quarter, Ali shares of Sina microblogging and Gold, Baidu's acquisition of PPS video industry and love Fantastic Art integration, Changyou acquisition of the remaining equity of Seventh Avenue, Herts strategic investment Shenzhou car rental ...... China's Internet industry competition Changes have taken place in the pattern of change, but change will always happen, but sooner or later, capital and mergers and acquisitions accelerated the moment of change.

From the perspective of mergers and acquisitions, the Internet giants have a large cash bill, but also want to use capital means to diversify the layout to make up for lack of business innovation. As users and channels are monopolized by several Internet giants, once the venture team's project is gazed at by giants, a small product or a similar product is plagiarized, often causing a fatal blow to the startup team. However, "plagiarism" has become a matter of itself, Reflects the lack of innovation ability of the giants. For which cases of plagiarism are not successful, the giant pockets of cash take the same tactics of capital to achieve the strategic layout.

As of Q1 2013, Baidu held cash and cash equivalents and short-term investments of about 5.445 billion U.S. dollars.

Tencent held cash and cash equivalents as of the end of 2012 and counted more than RMB27.2 billion worth of time deposits.

In June 2012, Alibaba Group completed the privatization of Hong Kong-listed company Alibababa.com in the amount of USD 2.5 billion cash. In September of the same year, Alibaba Group announced that it completed the repurchase of 20% shares held by Yahoo by 7.6 billion U.S. dollars and said that after the transaction was completed , The group's cash reserve is 3 billion U.S. dollars;

Netease's cash and short-cut investments totaled 2.4 billion U.S. dollars by the end of 2012;

Everyone holds cash and short-cast more than 850 million US dollars as of Q1 2013.

What is the commonality of M & A areas?

Big Internet companies favor investment projects focused on e-commerce, tourism, social networking, video and other fields. Companies that have been merged or invested have more or less shared features:

First, they are in a period of rapid growth in their industries, with huge potential user base and huge space for development. These companies have got stuck in the industrial chain and have a certain user base, but they need more support to continue to grow and develop. . Mobile portals, social networking, travel, e-commerce and O2O are hot topics in recent years for entrepreneurship and investment in the Internet. Naturally, they are especially favored by Internet giants. For example, Baidu invested where to go; Ali invested in Sina Weibo, Gold German, the United States Mission, Street unfamiliar; Tencent invested easy Xun, Gaopeng, Haole bought, Colin diamonds, beautiful said ...

Second, the competition pattern in the industry has not been determined. It needs to be integrated and horizontal, and the market share after the merger can be superimposed to determine or change the industry pattern. Such as Youku and potatoes, love odd arts merger PPS, Sohu video and PPTV rumors. The recent rumors of Qihoo and Baidu bidding Sogou belong to the industry's new force 360 ​​trying to change the industry pattern, and Baidu out of defensive considerations also Sogou throwing an olive branch, thus forming the boss and second child bidding for the third situation.

Third, business development has encountered specific bottlenecks and wants to find a "capable" main support business. Such as Sina micro-blog Alibaba shares, an important reason is the micro-Bo monetization resistance, hoping to help Ali in micro-Bo electricity providers to provide help; such as high German software Alibaba shares, high German companies are not short of money in recent years Want to shift from the car navigation B2B to the Internet B2C, high German map data, but the lack of Internet user data, hope Ali shares can strengthen data cooperation.

Fifth, there is a relatively independent business in a diversified company with a weak correlation, looking for additional synergy. For example, Sohu sold sogou to Qihoo.

Who may be next?

Video: PPTV, Thunder

After Youku potatoes, love Fantastic Art PPS, as well as the acquisition of 56 networks for everyone, the video industry continues to increase concentration, the industry pattern is becoming increasingly clear, in the "fight father" of the industry, financial and operational capacity of the site will be further washed brand. And the remaining, there are numbers on the Sohu video, Tencent video, Thunder look, PPTV, LeTV and several other sites do relatively well, taking into account Sohu video, Tencent video has a strong background of the employer may Further promote the industry consolidation, the formation of "many oligarchs" pattern.

In addition, two years ago Thunder openly submitted IPO prospectus had disclosed that Sohu had agreed to Thunder IPO issue price to buy $ 10 million Thunder Class A common stock, the story behind the episode has not been openly described in both sides, but the side reflect Sohu for Thunder company and business recognition, as well as the "cooperation" of the positive attitude, the future will not have further cooperation?

Video client PPTV and PPS after two major players PPPS and PPS, Baidu was acquired by Baidu, PPTV in 2011 Softbank 250 million US dollars financing is directed at the IPO, but the current IPO failed to put on the agenda, profitability is not strong, if the video As industry competition intensifies, PPTV may also need to consider other ways of capitalization if it can not.

E-commerce: Dangdang

Last year, Taobao + Lynx transaction volume exceeded 1 trillion, be regarded as a milestone in the e-commerce sector, Ali's e-commerce ecological strategy not only affects consumers, but also led to the outbreak of the surrounding industries; capital advantage of the largest Jingdong, the use of large-scale Expansion and "low price" strategy to crowd out competitors and stabilize the dominance of self-employed B2C. On the contrary, the situation of Dangdang.com is more and more embarrassed. Vipshop intelligently avoided the most competitive overall B2C field and cultivated A group of loyal brand discount products flash purchase consumer groups, with the increasing scale in the field of subdivision, the only product valuation has also been rising, currently more than 1.8 billion US dollars; , The public comment groups and several other service quality website has become increasingly prominent. Next, reshuffle in the field of electronic commerce will continue, the scale effect of the comprehensive big platform will show slowly, the living space of small websites will be smaller and smaller.

In an awkward situation in the industry, Dangdang market value only the current 420 million US dollars, to re-rise challenge Jingdong, Dangdang must have a strong financial strength, while the hands of cash only 260 million US dollars, had to continue to implement the contraction strategy , In order to gradually reduce losses and maintain their survival; Dangdang accumulated in the field of e-commerce over the years experience in the supply chain, user size, brand, etc. are valuable, but also the industry leader to continue to expand, with some M & A value . However, the biggest drag in the current downturn is estimated by its founders.

Online Travel: Hornet nest, cool news

Baidu acquisition where to go, Tencent stake in the same network and eLong, the largest online travel industry M & A has taken place, the industry pattern has basically clear. The mergers and acquisitions in the field, most likely in the field of subdivision, in particular, Ctrip is recently promoting the tourism industry chain layout, the acquisition of the railroad ticket website iron friends, restaurant website booking small secretary and other sites, also increased capital resorts earlier this year Tujia network. The future, the vertical field to do better, including the tourist community hornet's nest, search media cool news, may be Ctrip and other online travel chief strategic placement of investment targets.

Online game

The development of large-scale client online games market has encountered ceilings, page games, hand travel is the fastest growing online games market areas, and the share of the entire online games market is rising. However, valuations are often lower due to shorter game cycles, lower barriers to development, easy plagiarism, and the valuation of unlisted social game developer Zynga, which has fallen all the way to market since listing, with the current market cap falling to $ 2.3 billion. However, the growth prospects and underestimated value in this area may just be considered as an extension of the olive branch. Changyou has signed an agreement this month to acquire the remaining entire equity of Seventh Avenue, showing its optimism about this market. Giant Network, Perfect World, Netease and other traditional terminal companies, cash is also very much, the future does not rule out the possibility of considering the page travel, hand-mobile areas of mergers and acquisitions.

Information classification service website

58 City, the market is currently China's information market segments and local services duopoly, has a certain user size and brand awareness, but the cash flow may not be good, if the future can not IPO or further financing, so that the larger giants Shares or consolidation is also possible.

Comments class site

Public comment is estimated that BAT are very much like to have, but for now the public opinion may be more likely to win the IPO.

Regardless of who the next Chinese Internet industry is to be acquired, the industry's entry into the M & A quarter also marks a new phase of China's Internet.