Report: Baidu Acquires Social Video Rival PPS For Up to $400 Million

China’s leading search engine, Baidu (NASDAQ:BIDU), is said to have acquired a rival social video site for $300 million to $400 million. This rumored acquisition of PPS.tv would bolster Baidu’s own Hulu-esque video-streaming site iQiyi.

The buy-out will reportedly merge PPS into Baidu’s iQiyi. PPS is an old favorite with Chinese netizens from when it used to be packed with pirated TV shows and movies – that’s before PPS cleaned up with licensed content in the past couple of years.

We reached out to Baidu this afternoon, but a Baidu spokesperson declined to comment.

The Baidu-PPS rumors have actually rumbled on for about a month, but today’s reports suggest that it’s a done deal that will be announced soon.

Interestingly – and somewhat bizarrely – the company behind China’s top social video site, Youku Tudou (NYSE:YOKU), issued a statement about the Baidu-PPS rumors. Youku president Dele Liu says:

After the success and synergy created by the Youku Tudou merger, increasing consolidation was inevitable throughout the video industry. We are happy to see this purchase go forward, we expect this acquisition will further rationalize the industry and help reduce piracy in the sector.

But Dele Liu was just responding to the rumors, not insinuating that the news is true.

However, it is true that consolidation is inevitable in this pricey and heated sector where it costs millions of dollars to secure the exclusive rights to Chinese, Korean, or western TV dramas and movies. China’s biggest web company Tencent (HKG:0700) has also been bolstering its video site in the past year.

According to ComScore, China’s netizens watch upwards of four billion hours of web videos each month, making social video portals and licensed content an increasingly important part of the Chinese web scene.

(Source: Techweb – article in Chinese)