Net Deals Must Be about More than Capital

Since late April, a number of major investment and merger deals among Internet companies have been announced in China. The industry has long awaited this development, which is believed to mark the beginning of a deeper consolidation process in the industry.

Most of the recent deals are significant. Alibaba purchased an 18 percent stake in Sina Corp.'s Twitter-like weibo service for US$ 600 million and is entitled to increase its holdings to up to 30 percent in the future. In another investment of US$ 300 million, Alibaba also became the largest shareholder in Amap.com, an online mapping service. Also, Baidu Inc. announced a nearly US$ 400 million purchase of the online video unit of PPStream Inc., a popular TV streaming service it will merge with its own online video service subsidiary, iQYI.com.