25 Nov 2009 11:14

Shanda to acquire Ku6 for $44 mln - report

Shanghai. November 25. INTERFAX-CHINA - Shanda Interactive Entertainment Ltd. will acquire online video broadcast site Ku6 for an investment of $44 million, Chinese media reported on Nov. 25.

According to Chinese industry portal Sina, under the share swap Ku6 will be granted an unspecified amount of shares in Hurray, a wireless value-added services provider in which Shanda holds a 51 percent stake.

Representatives from both companies declined to comment when contacted by Interfax on Nov. 25.

Shanda has been moving toward becoming a comprehensive entertainment company by actively extending its reach into the content production segment. On Nov. 13, it has announced the establishment of a joint venture with Hunan TV for the purpose of content production and distribution.

Wang Ran, the chief executive officer (CEO) of China eCapital Corp., told Sina that Shanda's acquisition of a video broadcast site is not surprising, as Shanda needs a distribution platform for its burgeoning content production activities.

Cao Junbo, a senior industry analyst with iResearch, told Interfax on Nov. 25 that Ku6 will also benefit from the deal, as it has become increasingly difficult for online video sites to break even in the current economic environment.