One Hour China | The five drivers of China’s Internet deal frenzy

You can’t go a week without hearing of a new acquisition by Baidu, Alibaba or Tencent. While China’s Internet giants have been doing acquisitions for years, the last three months can best be described as a frenzy.

Tencent’s recent announcements have been impressive – including:

• They are buying 15% of Leju, an online property agency, for $180 million.
• They are buying 15% of e-commerce website JD.com for $215 million.
• They are buying 28% South Korean mobile game developer CJ Games for $500 million.
• They have paid $448 million for 36% of search engine Sogou.
• They have bought about 20% of review website Dianping.

And in the last few days, Chinese media has been reporting that Tencent is buying 20% of online video site Youku Tudou for approximately $300 million.

Alibaba’s recent moves have arguably been even more ambitious.

• They invested $215 million in mobile messaging app-maker Tango, a competitor to WeChat.
• They have announced plans to take control of China’s leading mobile mapping service, AutoNavi.
• They are investing $804 million for a controlling stake in ChinaVision Media, which has a library of movies, TV shows and sports broadcasts including some Chinese rights for the English Premier League soccer. 
• They have moved into Internet finance in a large way with Yu’e Bao.
• They have launched an entertainment investment fund called Yu Le Bao which lets people invest small amounts of money in TV and movie productions.
• They are investing $360M in a logistics joint venture with the Haier Group, China’s largest maker of appliances.
• And they have an agreement with Midea Group to sell the first intelligent air conditioners on Tmall.com.

Baidu has also made recent announcements:

• They are buying Chinese app distributor 91 Wireless for $1.9 billion.
• They are buying majority ownership of group buying platform Nuomi.com for $160 million.