BIG TECH COMPANIES
1. Baidu in Hot Water After Hospital Mix-Up
What: Baidu issued an apology on Sunday after it was revealed that searches for public hospitals affiliated with Shanghai’s prestigious Fudan University returned results for a private hospital instead. An expose by the state-owned broadcaster CCTV showed that several people went to the more expensive and less competent “Shanghai Fuda Hospital” instead of those affiliated with Fudan.
Why it’s important: Baidu is the search engine that most people rely on in China, where Google has been blocked since 2010. Baidu has a market share of nearly 70%, according to web traffic tracker StatCounter.
Big picture: Baidu has been fiercely criticized over the past two years for its weak vetting of health care advertisers, which are an important source of revenue. Many private hospitals pay to be top results for certain search terms. In the latest fiscal quarter ended July 31, Baidu’s revenue from online marketing was $3.18 billion, accounting for 80% of its total revenue. (Source: Caixin)
2. Google Cloud’s Head of AI Will Be Replaced by Carnegie Mellon’s Andrew Moore
What: Google Cloud is getting a new AI chief. Current head Fei-Fei Li will be replaced by Andrew Moore, who is dean of the school of computer science at Carnegie Mellon University, Google said on Monday, according to Business Insider.
Why it’s important: “The most notable event of Li’s nearly two-year tenure at Google was likely the leaked email exchange between her and other Google managers that some said showed she worried more about the company’s public image than the ethical concerns surrounding Google’s military contracts.”
Big picture: “There’s been a lot of turnover at Google’s cloud division in recent months. In August, Bogomil Balkansky, Google’s VP of cloud recruiting solutions and someone who had worked with Greene for years, left the company.” (Source: Business Insider)
3. Alibaba Opens Down After Founder Jack Ma Announces Retirement Plan
What: Shares of e-commerce giant Alibaba Group Holding Ltd. opened down 2.3% on Monday after founder and Chairman Jack Ma announced he will retire in a year to make way for a new generation of leaders.
Why it’s important: Alibaba’s New York-listed shares opened at $158.59, compared with its last closing price of $162.37 before Ma’s succession plan was announced on Monday in China. Current CEO Daniel Zhang will take over as chairman on Sept. 10, 2019, which is also Ma’s 55th birthday and comes in the year of Alibaba’s own 20th anniversary.
Big picture: Alibaba’s stock has lost more than a fifth of its value since a peak in early June, paralleling a similar correction for many Chinese internet companies whose stocks posted big gains in 2017 on bullishness about the Chinese internet. (Source: Caixin)
4. Jack Ma Is a Self-Made Billionaire. Now He Wants to Be a Teacher
What: “Alibaba was never about Jack Ma, but Jack Ma will forever belong to Alibaba,” the company founder wrote in an open letter released on Monday. After his retirement next September, Ma wants to return to education.
Why it’s important: Ma, who turned 54 on Monday, is one of China’s richest people, with a net worth of $36.6 billion, according to Forbes. He is seen as an icon of self-made wealth, and has a large following in China, including some people in remote villages. (Source: Caixin)
5. Tencent Shuts Poker Platform Amid Widening Gaming Crackdown
What: Tencent is closing a “popular Texas Hold’Em poker video game, the Chinese tech giant said to its users on Monday, in a further step to comply with intensifying government scrutiny hitting the country’s gaming industry,” Reuters reported.
Why it’s important: The company’s “market value slumped by around $20 billion in one-day last month over concerns that China would limit gaming after a crackdown on online games citing rising levels of myopia.”
Big picture: Tencent, “which draws a huge amount of its profit from gaming, is facing mounting challenges this year from stringent regulation and government censorship. It has had to pull one blockbuster game and seen others censured.” (Source: Reuters)
6. Tesla Charges Up Shanghai Unit
What: The Chinese unit of U.S. electric-car giant Tesla Inc. has boosted its registered capital by almost 50 times, as it ramps up efforts to expand into the world’s largest auto market. Tesla (Shanghai) Ltd. Corp., established in early May by Tesla’s Hong Kong unit, has seen its registered capital rise to 4.67 billion yuan ($680.4 million) from the previously announced 100 million yuan, according to Tianyancha, a company data provider.
Why it’s important: Previously, Tesla Shanghai said it would mainly be involved in the research and development of electric vehicles, their parts and batteries. But the firm’s business will also expand into manufacturing, including areas like auto parts and battery systems, the updated company filing showed.
Big picture: Earlier this year, the Chinese government rolled out a new policy that allows foreign companies to set up their wholly owned auto ventures in the country, making the Tesla’s Shanghai factory plan a reality. Also, Tesla is expected to face strong competition from local rivals. Domestic leader Nio Inc., which has filed for an initial public offering in New York, is also planning to set up a factory in Shanghai. (Source: Caixin)
DEALS AND FUNDRAISING
7. Studio Eros Strikes Content Licensing Deal with iQiyi
What: Movie studio Eros said it is partnering with Chinese video site iQiyi Inc to “provide Indian movies such as Bollywood blockbusters ‘Dabangg’ and ‘Devdas’ in the country,” Reuters reported. Details were not disclosed, but Eros “said its streaming service Eros Now will license its catalog of Indian movies, which Chinese viewers will be able to watch by October.”
Why it’s important: “Eros Now, which has rights to over 5,000 movies in various Indian languages, has 10.1 million paid subscribers in India.” Eros International’s Chief Executive Officer Kishore Lulla said they are targeting about $10 million in revenue in the first year through the deal.
Big picture: “Streaming services in China are subject to strict data storage regulations and foreign films and television are routinely censored, hindering companies such as Netflix and Amazon.com Inc’s Prime from taking full advantage of the world’s most populated country.” (Source: Reuters)
8. Xiaomi and NTT DOCOMO Sign Cellular Wireless Patent License Agreement
What: Smartphone-maker Xiaomi and Japanese mobile carriers NTT DOCOMO have entered into an agreement granting Xiaomi a worldwide license to DOCOMO’s cellular wireless standard essential patents.
Why it’s important: Smartphone-makers and Telecom operators in China are hoping to speed up the commercial rollout of 5G networks. Docomo previously announced plans to commercialize 5G services in 2020 for the Summer Olympics in Tokyo. (Source: Xiaomi)
Compiled by Hou Qijiang and Qian Tong.
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