Hulu
investor Providence Equity Partners
is pumping $50 million into a new online video company set up by Chinese Internet search giant Baidu
.
The news comes roughly 7 weeks after Baidu confirmed plans to established a new independent company to provide licensed, advertising-supported online video content to Chinese Internet users.
Although it isn%u2019t yet explicitly confirming that the name of the new company will be Qiyi in the press release about the investment, Baidu says it has registered the domain name qiyi.com
for the venture.
Reuters broke the news
about a possible forthcoming investment by Providence Equity Partners in the new venture on January 5, citing local news sources who reported that the new joint venture company had received about $60 million in private equity funds, with Baidu investing about $10 million into the firm.
If those reports were accurate, that means Qiyi only has Baidu and Providence as its backers for now. Baidu has also said that it will continue to maintain majority ownership in Qiyi.
According to eMarketer
, China will have 518 million Internet users in 2010. The size of the country%u2019s online video market was approximately 162 million yuan ($23.73 million) in Q3 2009, according to data from research firm Analysys International, and analysts expect sales to triple in the coming years.
Update: more context on the space is available here
(via comments).
Baidu stresses that it will work with regulators to ensure the %u201Clawful distribution%u201D of professionally produced media and entertainment content on the Internet.
From the About
page:
Qiyi (www.qiyi.com) is an independent operated video website created by the world%u2019s largest Chinese search engine Baidu Inc(BIDU.O). Qiyi intends to be a high-definition online video platform, offering the latest, the most complete, and most professional high-quality licensed content to users for free.
Under the premise of orientating correct public opinions and strictly executing the government policy and regulation, Qiyi provides diversified licensed video content and launches various channels for hit TV shows, movies, documentaries, cartoons, music, variety shows, etc., to fulfill the increasing needs from the users and to enriches customers%u2019 cultural life.
According to the customer-oriented principle of Baidu, Qiyi aspires to reach the highest satisfaction of customers, and strives for perfection of exclusive content, reasonable products and viewing experience.
Meanwhile, Qiyi will strictly abide by copyright laws and administrative regulations, to take copyright protection measures to protect the legitimate rights and interests of copyright holders. Qiyi copyright of all content through legitimate channels such as procurement obtained.
Qiyi adopts meanwhile a series of measures to protect the legal rights of content providers and follows strictly the copyright-related laws and regulations. All videos on Qiyi are from legal channels.
Qiyi makes profit from advertisers on the websites and will also committed to developing other profit models supported by both of the users and the advertisers. The licensed online videos are totally free for internet users.
Qiyi keeps making efforts in the future operations to be the favorite video viewing platform of Chinese internet users%u2019, and meanwhile to spread the advanced socialism culture by undertaking its social responsibility as an outstanding corporate citizen. Qiyi is playing a positive role in developing a harmonious society.
It%u2019s just like Hulu, only with governmental censorship!
(Via press release
)
Website: baidu.com Location: Beijing, China Founded: October 11, 1999 IPO: August 5, 2005 Baidu is the largest Chinese language search engines. Baidu%u2019s mission is to provide the best way for people to find information online, including Chinese language web pages, news, images and multimedia files though links%u2026 Learn More
Website: provequity.com Location: Providence, Rhode Island, United States Founded: 1989 Investments: Providence Equity Partners is a leading private equity firm focused on media, entertainment, communications and information investments. The firm manages over $22 billion (Nov. 2008) in equity commitments and has invested in more than 100 companies%u2026 Learn More
Information provided by CrunchBase
Hulu Investor Injects $50 Million Into Baidu’s Online Video Venture, Qiyi
And Google Begat… – BusinessWeek
And Google Begat…
The search giant’s former employees are seeding tech startups%u2014and shaping another wave of innovation
By
Spencer E. Ante and
Kimberly WeisulDuring the holidays last year, Aydin Senkut and Elad Gil gathered 50 of their friends at a health-food restaurant in Palo Alto. Over turkey burgers and tofu wraps, they talked about tech trends and how to get rich. Or, more precisely, how to get richer.
Senkut, Gil, and their dining circle are alumni of Google (GOOG), one of the greatest engines of wealth creation the U.S. has ever known. Since going public six years ago, Google has generated more than $170 billion for its employees and investors. Many of the millionaires the company has produced are young, wired into the latest developments in tech, and at ease with risk. Which explains why so many Google alums%u2014including many of those at Senkut and Gil’s gatherings%u2014are active angel investors, attempting to add another zero to their bank accounts and another innovative company to their list of accomplishments. “I feel like we have such a strong network, it’s almost like we’ve recreated Google outside of the Google walls,” says Andrea Zurek, a 39-year-old backer of 26 startups.
More than 40 ex-Googlers have invested in about 200 fledgling companies since 2005, according to the research firm YouNoodle and reporting by Bloomberg BusinessWeek. At least a half dozen current Google executives, including CEO Eric Schmidt and co-founders Larry Page and Sergey Brin, are also financing young companies. Numerous angel-watchers say the Google group has more in common than just pedigree. Unlike many venture capitalists, the Googlers like to swap investment ideas and back startups together. They’re also willing to take big chances. “[They’re getting into] very risky deals that can be extremely rewarding,” says Jeff Clavier, a veteran venture capitalist who founded Palo Alto-based SoftTech VC in 2004. “They have been very active as a group over the past two to three years.”
MORE THAN MONEY
The results have been impressive. Companies backed by Googlers include Twitter, Tesla Motors, and gamemaker Tapulous. “As Google matures, its alums are continuing to have a huge impact on Silicon Valley and the tech industry,” says Ron Conway, one of the Valley’s most active angel investors, who has backed 190 companies, including Google, Facebook, and Twitter.
One reason for their success is that Google’s angels have more to offer struggling entrepreneurs than just money. Bart Decrem, a Stanford University law grad, turned to the Google network when he was starting Tapulous in 2008. The company’s Tap Tap Revenge game requires players to tap on-screen balls to the beat of a song%u2014not exactly a sure thing of an idea. But Decrem thought the game might become a substantial business by selling it on Apple’s (AAPL) iPhone. He raised $500,000 from a dozen angels, including Senkut and Zurek, who advised on strategy, connected the company with new partners in Asia, and helped it explore platforms for mobile phones that use Google’s Android software. Today, Tap Tap games have been downloaded more than 25 million times and Tapulous is solidly profitable, with $1 million in revenues a month.
Google’s Angels dabble in a wide variety of businesses. Zurek has money in a premium vodka maker and a South Korean frozen yogurt emporium. Yet the angels tend to concentrate their cash in what they know%u2014search technology, mobile computing, and the consumer Internet. Already, Twitter, backed by former Google executive Chris Sacca, is the hottest startup in Silicon Valley, pioneering a new field of real-time communications. The online personal finance service Mint.com, with money from Senkut, proved so popular that market leader Intuit (INTU) bought it for $170 million last year and made founder Aaron Patzer one of its top execs. Search provider Powerset, backed by Senkut, was acquired by Microsoft (MSFT) in 2008, and its technology became a key part of the Bing search engine.
SERIOUS SCHMOOZING
The most active Google angel thus far is Senkut, a 40-year-old native of Turkey who has invested between $25,000 and $150,000 in more than 60 startups. Senkut joined Google in 1999 as its 63rd employee. He left in 2005 and promptly took his mother to Paris for her 60th birthday, purchased two multimillion-dollar homes in the Bay Area, and treated himself to a Lamborghini.
With that out of his system, he set about becoming a full-time angel. Senkut is often the first investor behind an idea, and to date 11 of the startups he helped fund have been bought by companies including Google, AT&T (T), and Microsoft. Senkut also fosters the investment of others by organizing two regular events for alums, one for angels and entrepreneurs, and another for all ex-employees, at spots such as the Calafia Cafn Palo Alto, owned by Google’s first in-house chef. Senkut is raising money for his firm, Felicis Ventures, according to two angel investors, and could not comment on his investments for this story. (Securities laws prevent the public solicitation of funds.) In an interview last October, though, before four of his companies were sold, Senkut said his investments had produced double-digit annualized returns and that, at the time, he was being pitched new business ideas several times a day.
If Senkut is the established star among the Google angels, Chris Sacca is the up-and-comer. The 34-year-old Georgetown University law grad joined Google in 2003 and left in 2007. Of the 31 startups he’s backed, his biggest hit is Twitter, in which he invested $50,000 just as it was getting started in 2007.
Working out of a 3,000-square-foot home in Truckee, Calif., a small ski town near Lake Tahoe, Sacca hikes and snowshoes most mornings before breakfast and commutes to San Francisco for three days every two weeks. It’s an unconventional way to supervise investments, but Sacca has an unconventional approach to investing, period.
One Friday night in December 2008, he posted a message on Twitter asking if any startups were working late. “We tweeted back, ‘we’re FanBridge and we work hard every Friday night,'” says Spencer Richardson, its 25-year-old co-founder. FanBridge makes software that helps musicians manage marketing and relationships with their fans. A few weeks later, Sacca flew to New York and met with the company’s founders. “They had day jobs and built this site that had 20 million users, adding 100,000 users a day,” says Sacca. “It was a no-brainer.”
Over the next few months, Sacca invested $50,000 and pulled in several hundred thousand dollars from other angels. Last year, FanBridge’s founders considered offering their products to authors, comedians, and other artists; Sacca advised them to stay focused on the music industry. Today, FanBridge is profitable and used by 55 million music fans. “The feedback from him was, ‘start by being the best at something, then branch out,'” says Richardson.
The Google Angels may have several more breakout companies developing in their portfolios. Sacca has invested in Lookout, a promising developer of security software for mobile phones. Several ex-Googlers and current Vice-President Marissa Mayer are behind Square, which aims to displace credit-card swiping machines with a cheaper payment system that works through smartphones. And current Google exec Joshua Schachter helped finance Foursquare, a mobile phone service that lets friends share tips on local hotspots and is being used more than a million times a week. “What drives us is the innovation, the excitement of working with people we like,” says Zurek.
Paul Graham, who co-founded the startup incubator Y Combinator, believes the tech industry has just begun to appreciate that Google’s wealthy ex-employees may have not just a single innovative second act, but potentially hundreds of them. “When people write the history of Silicon Valley 20 years from now,” says Graham, “the true impact of Google could come more from all the things that Google people go on to do after they leave Google.”
Who are the top angel investors? To find out, go to www.businessweek.com/go/10/angels
Ante is an associate editor for BusinessWeek.
Kimberly Weisul is editor of BusinessWeek SmallBiz
.
Aydin did a talk at CVCF last year as well.
Great to see Google alumni is investing back into the startups.
Hong Kong’s Six Waves Raises US$17.5 million for Facebook Games
Hong Kong – Six Waves, a Hong Kong-based social gaming group, has received US$17.5 million cash injection from Insight Venture Partners to support its international expansion plans.
Rex Ng, co-founder and CEO for Six Waves said social games have expanded rapidly fueled by the strong growth of social networks.
As well as the new capital the group has nabbed Turner International’s top executive Arthur Chow to act as its as chief operating officer.
“Millions of people are connecting with each other and players globally, to meet online and play together everyday,” Ng said.
The investment from Insight Venture Partners, a technology and internet investment firm, will be used to build infrastructure and a distribution pipeline on the back of Six Waves’ strong market share on Facebook to grow its presence globally.
Chow who has experience in digital media sector and corporate development will be responsible for overall strategy formulation and execution of Six Waves as a distributor of social games.
He will also be in charge of the finance, product and engineering teams as well as seek and evaluate potential strategic partners and investments to expand the company’s business globally.
Six Waves has more than 50 million monthly active users playing its games from various countries all over the world.
Its current game portfolio includes more than 20 published games such as World Poker, Happy Harvest, Animal Paradise that boasts close to three million monthly active users and recently released games like Happy Hotel, Dress Me Up and Shadow Empire.
Six Waves will use the new funding to support developers by providing distribution, localisation, monetisation and infrastructure solutions to grow exponentially in social media space.
Jeff Horing, managing director for Insight Venture Partners, said: “We support Six Waves’ vision to connect people through games and provide a fun, interesting and energizing environment for consumers.”
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