Changyou buys up gaming news site
Changyou.com, a leading mainland online games developer and operator, has agreed to pay US$162.5 million in cash to acquire gaming news portal 17173.com from parent company Sohu.com.
The transaction, which is expected to close this month, marks the second major acquisition this year by Nasdaq-listed Changyou.
The firm completed a US$68.26 million deal in June to buy the majority equity stake in web-based games developer Shenzhen 7Road Technology. Web-based games are played by users on their browser without installing a program.
The investment in 17173, which is highly regarded on the mainland for its authoritative reporting of game-related news, is expected to kick off Changyou's so-called platform initiative.
'This acquisition will further drive our efforts to serve gamers not only on the product side, but also on the service side,' Changyou chief executive Wang Tao said. 'Aside from news services, gamers today have needs for downloading, sharing, and trading services, as well as an online community.'
Market research firm IDC has forecast online games revenue on the mainland to reach US$5.432 billion this year from US$4.527 billion last year.
Changyou also has plans to further develop the 17173 portal, which was set up by Sohu more than 10 years ago, as an effective marketing medium for online advertising.
'Our leading position in web-based games and our mobile game initiatives give us advanced market knowledge that 17173 can leverage to plan and grow its news channels more effectively,' Wang said. 'Our offline promotion workforce and our network of overseas game companies can also be used to promote 17173.'
According to media services firm ZenithOptimedia, online advertising expenditure on the mainland is predicted to hit 40.8 billion yuan (HK$49.8 billion) this year.
The price, in US dollars, that Changyou has agreed to pay its parent for 17173.com