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Rumor: Baidu May Acquire Tudou

Securities Times, 8/10/11

Chinese online video site operator Tudou Holdings Limited is reportedly seeking to be acquired, possibly by Chinese internet company Baidu (Nasdaq: BIDU), in light of its IPO prospects.

A source close to senior Baidu executives said the company has been discussing two possible acquisition plans with Tudou. Under the first approach, Baidu would directly invest in Tudou, which would become a subsidiary of Baidu alongside online video site Qiyi, but both would continue to function as independent businesses, with Qiyi focused on licensed films and TV series, and Tudou focused on user-generated and self-produced content. The second approach would involve Baidu funding Qiyi's acquisition of Tudou to form a single comprehensive video portal to challenge Youku.

A Qiyi marketing department representative could not confirm nor deny the rumors, saying they needed to check with Baidu. Baidu PR had no knowledge of the rumors. Tudou, currently in its IPO silent period, was unavailable for comment.

Keywords: Internet IPO online video Tudou Baidu BIDU Qiyi M&A

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