According to reliable source, Shanda has confirmed full acquisition of the online video sharing site Ku6, reported by Raw Plunger, although neither parties have confirmed this deal to the media yet.
It’s definitely a big year for Shanda this year, following the IPO of its game division, acquisition of Hurray, partnership with Hunan TV, and the announcement of Shanda’s own Theme Park (details refer to Shanda, China’s Very Own Disney?), the acquisition of a video sharing site, such as Ku6, is an expected move from Shanda, analysts has pointed out. It will be part of Shanda’s master plan of becoming Disney in China.
As exciting as it may sound, this deal still brings quite some risks to Shanda.
First of all, online sharing business is more of a ‘Winner Take All’ model. The big ones such as YouKu or TuDou have taken most of the market in China; Ku6 has already been left behind quite some distance from the first tier.
Secondly, by acquiring Ku6, Shanda may face the risk of copy right breaching and financial burden. Ku6, actually none of the online video sharing site, has managed to be profitable just yet. Giants like Google are forced to pay incredibly high Copyright fee for its video sharing service YouTube. Shanda might just run into the same issue.
Analysts believed that the main reason that Shanda chose Ku6 to acquire is the relatively lower price. The final deal could be lower than 100 million USD if the deal has come through.
But is Shanda Chinas Own Disney ?
Not long after so many of us living in Shanghai were clapping our hands and jumping in the air for joy that Disney Theme Park project has officially been approved and we’ll have a Disneyland soon at our doorsteps, Shanda (NASDAQ:SNDA) has announced that it will build a so called “Interactive Entertainment Theme Park” in Wuxi, a city in Jiangsu province, 130km away from Shanghai.
A round of applause to Shanda please! It has gone one step closer to its goal – becoming the Disney of China. Apart from being an extremely successful online game operator/producer, Shanda has since tried to extend its influence to many other entertainment sectors such as
Reading – backed by the biggest online reading site QiDian.com
Movie – by partnering with Hunan Broadcasting Company, which is a leading entertainment company, in a joint project, will start filming two movies, one being an adoption of a novel from Shanda’s very own literature site QiDian.com, mentioned above.
Mobile – by acquiring Digital Red a number of years ago and Hurray this year.
Record – by acquiring Hurray this year, which is not only a mobile entertainment company but also a known record house.
Theme Park – the most recent move, building its own dreamland just like its wanna-be Disney.
I for one would love to see it actually happens, but still worried that we have seen so many disappointing cases of China’s own companies lost their way try to chase unnecessary targets.
But it may as well just turn out to be a triumph as we hoped; after all Shanda is so pocket full from the recent IPO and what could go wrong when you have so many cash to burn.
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