Baidu to Acquire YY Live Streaming for $3.6 Billion

Baidu announced on Monday its agreement to purchase Joyy’s YY Live China-based live-streaming platform for $3.6 billion in a cash transaction, representing a significant step for the Chinese internet company to broaden its business beyond its primary search capabilities and increase its presence in the video entertainment sector.

This announcement was made by Baidu during its quarterly earnings report and marks the company’s largest investment to date in video streaming. Currently, YY is only divesting its Chinese operations to Baidu. The completion of this deal is contingent upon fulfilling specific requirements and is anticipated to take place during the first six months of 2021, according to Baidu.

This acquisition occurs as the search engine company is working to maintain its position against emerging competitors like ByteDance, which has been challenging its dominance in online advertising as Chinese consumers dedicate more of their time to content recommendation applications driven by algorithms.

Concurrently, this sale enables Joyy to concentrate more fully on international expansion, as its domestic market is becoming increasingly competitive with major video platforms such as Kuaishou and Douyin, the sister app to TikTok. Joyy, recognized as a pioneer within China’s live streaming sector, has cultivated a base of over 4 million paying subscribers who view performances and purchases from influencers on the video application.

Last year, Joyy finalized the acquisition of Bigo for $1.45 billion, a project initially launched by its founder to explore opportunities in international markets. Bigo manages the streaming application Bigo Live and the short video platform Likee, both of which have substantial user bases outside of China but were recently prohibited in India due to escalating border disputes between the two nations.

“This transaction will position Baidu as a prominent platform in the live streaming space and diversify our income streams,” stated Robin Li, Baidu’s co-founder and Chief Executive Officer, in a formal release.

“YY Live is expected to benefit from Baidu’s extensive user base and robust mobile environment, while Baidu will gain valuable operational expertise and knowledge in the development of large-scale, video-focused social media, along with a strong network of content creators that will further enhance Baidu’s existing content provider network.”

Baidu will encounter considerable challenges in the Chinese video streaming market. Both Kuaishou and Douyin, the leading short video platforms in the country, have integrated live streaming as a core component of their user experience to improve monetization (through methods like virtual gifting) and user retention.

Kuaishou reported 300 million daily active users in June, and Douyin surpassed 400 million daily active users in January. In contrast, Baidu’s primary application had approximately 200 million daily active users as of September. YY recorded around 40 million monthly active users for its live streaming service in the third quarter.

This article has been updated to include additional background information regarding Joyy.