Cheetah Mobile to accelerate move into content after News Republic acquisition

World’s leading mobile security and utility app developer bought the media app operator for US$57 million

PUBLISHED : Tuesday, 23 August, 2016, 11:45am
UPDATED : Tuesday, 23 August, 2016, 10:46pm

China’s Cheetah Mobile, considered the world’s leading mobile security and utility app developer, is preparing to accelerate its transition into a viable content-focused business, following a US$57 million purchase of media app operator News Republic in the second quarter.

“This is a huge step for us,” chief technology officer Charles Fan Chenggong told the South China Morning Post.

“We can potentially reshape the news industry by introducing a strong, artificial intelligence-driven, personal news delivery service.”

The acquisition marks the most-ambitious bet to date by the New York-traded Cheetah Mobile, amid its recent struggle to boost advertising income.

Analysts at the Blue Lotus Research Institute in Hong Kong said Cheetah had good “synergy” with News Republic, which works with more than 1,650 media partners. Cheetah Mobile had 623 million monthly active users as of June 30.

News Republic, with dual headquarters in Bordeaux, France and San Francisco in the US, is available in 37 languages and 40 different editions.

The news app can be downloaded from both the Google Play Store and Apple’s App Store. It also comes preloaded on certain smartphone models, including those from Samsung Electronics and Huawei Technologies.

Users can gain access to articles, videos and photos from many prominent media organisations, including CNN, Sina Corp, Reuters, Bloomberg and the Financial Times.

Our priority for the next couple of quarters is to grow the user base of News Republic and make it the number one news app worldwide
Cheetah Mobile chief technology officer Charles Fan Chenggong

According to News Republic, it “leverages editorial, algorithmic and community intelligence to offer ... custom news flows”.

“Our priority for the next couple of quarters is to grow the user base of News Republic and make it the number one news app worldwide,” said Fan, who leads Cheetah Mobile’s big data analytics and artificial intelligence initiatives. “The focus will be overseas markets since 80 per cent of our user base is outside of China.”

Fan said changes made by Facebook in its advertising algorithm had made an impact on Cheetah Mobile’s revenue.

Facebook’s adjustment was made to help advertisers measure how their campaigns perform on third-party apps. Those placed on Cheetah’s apps did not perform well, according to reports.

Hong Kong-listed Kingsoft Corp, which owns about 47 per cent of Cheetah Mobile, said last week that its subsidiary has been expanding its content portfolio “to cope with the lacklustre revenue from overseas third-party advertisement platforms”.

Cheetah Mobile last Friday posted a 150.45 million yuan (HK$175.4 million) net loss in the second quarter, compared with a 60.09 million yuan net profit in the same period last year, on increased investments in content-driven products and a 95.2 million yuan net impairment loss on investments.

Revenue was up 18 per cent to 1.05 billion yuan from 886.22 million yuan a year earlier.

Blue Lotus forecast a “large probability of a recovery in the fourth quarter”.