Providence Equity Partners will invest $50 million for a minority stake in a new online video company that has been set up by Chinese internet search engine giant Baidu.
The new company will develop an online video business which will provide licenced content in China and will be supported by advertising. It has registered http://www.qiyi.com
as its domain name. Baidu retains a majority stake in the new venture.
“As the world’s largest Chinese language internet search company and also the dominant video search engine in China, Baidu has unmatched competitive advantages in its user base and traffic,” Jonathan Nelson, chief executive officer of Providence, said in a statement. The new venture will work with regulators to ensure the lawful distribution of professionally produced media and entertainment content on the internet, he added.
Headquartered in Beijing, Baidu was established in the year 2000 and has received venture capital backing from the likes of Draper Fisher Jurvetson and IDG Ventures in the past. Baidu’s shares currently trade on the NASDAQ, where it was listed in August 2005.
Providence has previously made three investments in Asia. In September 2008, the firm teamed up with Philippines-based Ayala Corporation to buy call centre outsourcing business eTelecare Global Solutions for $290 million. Its other investments in Asia include the acquisition of a 15 percent stake in Indian wireless operator Idea Cellular, reportedly for $400 million, and a $640 million investment for a 20 percent state in its subsidiary Aditya Birla Telecom.
Providence specialises in investments in media, entertainment, communications and information services. The firm manages assets of more than $22 billion and has invested in more than 100 companies across more than 20 countries. The firm has offices in Providence, New York, London, Los Angeles, Hong Kong and New Delhi.