A Research On The M&A Of Video Websites

The video websites has been developed to the top one application on the Internet market in China. Thanks to the Network constructing and more richer content, the people who use the video websites reach to 400 million. However, on the occasion of the successful development of the video websites, they still could not achieve profitability, even fell into a embarrassing situation that a continually loss could not be avoided. Thus, the video websites hope to solve the problems of costs, resources and channels through the help with mergers and acquisitions.Specifically, the motion of the M&A in video websites industry mainly including two reasons:First, solve the efficiency problem; second, solve the profit problem. With the help of M&A, both of the video sites and the participants in M & A activity have produced some management, or business or financial synergies. Moreover, on the course of M&A, economies of scale, economies of scope and the effectiveness of the network economy has been fully exploited. Ultimately, the essence of the M&A is to build a new business model and promote a healthy and sustainable development of video websites.Actually, the Deep-seated reasons for M&A is to build an effective business model.Video websites produced three M&A modes:horizontal M&A, vertical M&A and conglomerate M&A. As a consequence, different modes have produced different business models. Although some video websites benefit from mergers and acquisitions, some are not, or the effect is not so obvious, they gain a channel to build the business model. For example, " YOKU+TUDO"-a typical horizontal M&A mode, has deepened "free+ pay" business model in the cross-subsidies; LETV formed a business model that permeate the complete chain of this industry through vertical M&A; And "SUNING+ PPTV" "ALIBABA+ YOKU,TUDO" make use of conglomerate M&A to build a full map-style multi-business mode.In recent years, the M&A has been a beautiful scenery in video websites industry, but this is just a beginning.To build an effective business model will always be the main factor of promoting the video websites to do mergers and acquisitions activities. In future, the M&A of video websites may towards a trend that video websites will be deeply involved in the value chain of the whole video industry. Specifically, content will become a focus of M&A in video websites industry, the popularity of smart phones, tablet PCs and other mobile terminals will promote the M&A in the terminal area, the cooperation between TV station and video websites guide a M&A direction in video industry.