Marbridge Daily

<- January 06, 2011 ->

Qiyi to IPO in 2014

Southern Metropolitan News, 1/06/11

Gong Yu, CEO of Chinese internet firm Baidu's (Nasdaq: BIDU) subsidiary online video site Qiyi, has revealed that Qiyi hopes to realize a profit every quarter in 2012, and have annual revenues of USD 100 mln by 2014. Once achieving these milestones, the company will consider going public. Gong added, "This year we plan to seek additional financing, but mainly to prepare for future needs, as currently our cash flow is sufficient."

Gong stated, "Currently most online video websites are not yet profitable, but from an industry-wide perspective, the top three to five sites will definitely be generating a profit by around 2012. The two sources of income for these sites are fee-paying users and corporate advertisers. Advertising revenue for online video sites exceeded RMB 600 mln in 2009, in 2010 it was nearly RMB 2 bln and it is estimated to reach RMB 4 bln in 2011. The operating expense for each of the major sites is between RMB 400 mln and RMB 600 mln annually. So it could be said that the top five sites can definitely generate a profit within two to three years."

Gong added that Qiyi is positioned as a film and television portal, only showing genuine, copyrighted material. "Our company does not feature news, sports, automobiles or real estate. We only feature movies, television series, documentaries, arts programs, cartoons and short entertainment pieces."

Since Qiyi went online 8 months ago, over fifty companies have already advertised on the site, including Proctor and Gamble, Unilever and Shanghai Volkswagen. Gong said, "Since we started featuring ads in June or July last year, our cumulative advertising income has already exceeded RMB 10 mln". Gong aims to see Qiyi reach break-even on a consistent quarterly basis throughout 2012.

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