Baidu Acquires JOYY's Live Streaming Business in China

Rhea-AI Summary

Baidu (NASDAQ: BIDU and HKEX: 9888/89888) has successfully acquired YY Live, the video-based entertainment live streaming business in mainland China previously owned by JOYY Inc. The acquisition was completed for approximately US$2.1 billion, as announced on February 25, 2025.

As part of the transaction, approximately US$1.6 billion that Baidu had previously deposited into escrow accounts under a share purchase agreement (which later ceased to be in force) has been fully released back to Baidu. The company plans to reinvest these released funds specifically in its cloud and AI infrastructure, further strengthening its position as a leading AI company with strong Internet foundation.

Positive

• Acquisition of YY Live expands Baidu's presence in the video entertainment streaming market in China
• US$1.6 billion previously in escrow has been released back to Baidu
• Released funds will be invested in cloud and AI infrastructure
• Strategic acquisition aligns with Baidu's positioning as a leading AI company

Negative

• Significant capital expenditure of US$2.1 billion for the acquisition

Insights

Financial Analyst

Baidu's $2.1 billion acquisition of YY Live marks the conclusion of a complex transaction that has finally materialized after apparent regulatory hurdles. The deal's structure is particularly noteworthy – Baidu has recovered $1.6 billion previously held in escrow from an earlier failed attempt, effectively reducing the net new capital outlay to around $500 million.

This acquisition represents a strategic pivot for Baidu in three critical dimensions. First, it significantly expands Baidu's digital ecosystem beyond its traditional search business into entertainment, creating new monetization channels through virtual gifts, subscriptions, and advertising. Second, it positions Baidu more directly against ByteDance's Douyin and Tencent's ecosystem in the battle for user time-spent – a important metric in China's digital economy. Third, it provides Baidu with valuable user data that can enhance its AI algorithms across its entire product suite.

The redirecting of the $1.6 billion toward cloud and AI infrastructure signals Baidu's continued commitment to its AI-first strategy. This investment timing is strategic as China pushes for technological self-sufficiency amid ongoing geopolitical tensions. For investors, this represents Baidu doubling down on what has become its core differentiation strategy against larger rivals.

The live streaming market in China reached approximately $30 billion in 2024, with YY Live commanding roughly 8-10% market share. While not the market leader, YY Live brings a loyal user base that skews toward tier 2-4 cities – demographics that complement Baidu's existing user profile and potentially open new advertising opportunities.

Key risks include integration challenges, evolving regulatory oversight of live streaming content in China, and potential cultural misalignment between Baidu's engineering-driven culture and YY's entertainment focus. Additionally, the live streaming space faces intensifying competition and margin pressure as platforms compete for top creators.

For Baidu's balance sheet, this acquisition is manageable given its approximately $25 billion cash reserves, leaving ample resources for continued AI investments. The deal structure also demonstrates financial discipline in recovering previously committed capital while still executing on strategic objectives.

BEIJING, Feb. 25, 2025 /PRNewswire/ -- Baidu, Inc. (NASDAQ: BIDU and HKEX: 9888 (HKD Counter) and 89888 (RMB Counter)) ("Baidu"), a leading AI company with strong Internet foundation, today announced that Baidu entered into agreements with JOYY Inc and acquired the video-based entertainment live streaming business in mainland China (known as YY Live) previously owned by JOYY. Baidu paid an aggregate purchase price of approximately US$2.1 billion. As part of the transaction, the sum of approximately US$1.6 billion that Baidu previously deposited into escrow accounts in accordance with a share purchase agreement (which subsequently ceased to be in force) has been fully released to Baidu. Baidu plans to invest such released funds in its cloud and AI infrastructure. 

About Baidu

Founded in 2000, Baidu's mission is to make the complicated world simpler through technology. Baidu is a leading AI company with strong Internet foundation, trading on NASDAQ under "BIDU" and HKEX under "9888". One Baidu ADS represents eight Class A ordinary shares.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Baidu may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in announcements made on the website of The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Baidu's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Baidu's growth strategies; its future business development, including development of new products and services; its ability to attract and retain users and customers; competition in the Chinese Internet search and newsfeed market; competition for online marketing customers; changes in the Company's revenues and certain cost or expense items as a percentage of its revenues; the outcome of ongoing, or any future, litigation or arbitration, including those relating to intellectual property rights; the expected growth of the Chinese-language Internet search and newsfeed market and the number of Internet and broadband users in China; Chinese governmental policies relating to the Internet and Internet search providers, and general economic conditions in China and elsewhere. Further information regarding these and other risks is included in the Company's annual report on Form 20-F and other documents filed with the Securities and Exchange Commission, and announcements on the website of the Hong Kong Stock Exchange. Baidu does not undertake any obligation to update any forward-looking statement, except as required under applicable law.  All information provided in this press release and in the attachments is as of the date of the press release, and Baidu undertakes no duty to update such information, except as required under applicable law.

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SOURCE Baidu, Inc.

FAQ

What business did Baidu (BIDU) acquire from JOYY?

Baidu acquired YY Live, JOYY's video-based entertainment live streaming business in mainland China, for approximately US$2.1 billion as announced on February 25, 2025.

How much did Baidu (BIDU) pay for YY Live?

Baidu paid approximately US$2.1 billion to acquire YY Live from JOYY Inc.

What will Baidu (BIDU) do with the US$1.6 billion released from escrow?

Baidu plans to invest the US$1.6 billion released from escrow accounts in its cloud and AI infrastructure.

When did Baidu (BIDU) complete the acquisition of YY Live?

Baidu announced the completion of the YY Live acquisition on February 25, 2025.

How does the YY Live acquisition fit into Baidu's (BIDU) business strategy?

The acquisition aligns with Baidu's positioning as a leading AI company with strong Internet foundation, expanding its presence in video entertainment streaming in China.