Baidu (NASDAQ: BIDU) on Monday reported RMB 28.2 billion (USD 4.16 billion) in total revenue for the third quarter, up 1% year-on-year, according to a release after the close of the US markets. The number is higher than analyst expectations of RMB 27.45 billion, based on IBES data from Refinitiv. The core search engine business generated RMB 21.4 billion (USD 3.15 billion) in the quarter and is accounting for about 75.9% of the company’s total revenue.
Baidu further announced that it will acquire JOYY’s (NASDAQ: YY) domestic livestreaming business in China (“YY Live”), which includes the YY mobile app and YY.com website, for USD 3.6 billion in cash.
“This transaction will catapult Baidu into a leading platform for livestreaming and diversify our revenue source,” said co-founder and CEO Robin Li. “YY Live stands to benefit from Baidu’s large traffic and thriving mobile ecosystem, while Baidu will receive immediate operational experience and know-how for large-scale video-based social media development, as well as an enviable creator network.”
Baidu’s CEO added in the earnings call on Tuesday that revenues from the company’s own livestreaming business, including that on the main Baidu app, the Tieba knowledge sharing channel, as well as the Haokan and Quanmin video platforms, have grown 80% last month.
“Baidu is trying to use its balance sheet to vault from being a streaming laggard to a tech ecosystem ready to compete with the likes of Bytedance,” Brock Silvers, chief investment officer of Kaiyuan Capital, told KrASIA, adding that Baidu has ample liquidity. “This is a bold move, but it seems to make a good deal of sense,” he said.
JOYY meanwhile reported RMB 6.3 billion (USD 925.9 million) in revenue for the third quarter, as well as net income of RMB 2.3 billion (USD 339.2 million), up from RMB 61.8 million in the same period of 2019. This increase is primarily due to the gain from the partial disposal of its investment in Huya (NYSE: HUYA), according to the earnings release by the company on Monday.
After selling YY Live, JOYY still owns Singapore-based short video and livestreaming app BIGO, edtech firm 100 Education, which is targeting primary to high school students, gaming company Duowan.com, and a smaller part of Huya.
JOYY’s CEO and chairman David Li Xueling said in a statement that the firm will continue to expand the livestreaming and short-form video content ecosystem in key overseas markets, while exploring new business lines, aiming to further enter into the industrial AI internet sector.