Baidu Acquires YY Live from Joyy Inc. for $2.1 Billion

On February 25, 2025, after a four-year tug-of-war, Baidu announced that it had reached an agreement with Joyy Inc. to acquire the latter’s video entertainment live streaming business in mainland China (i.e., YY Live), for a total purchase price of approximately $2.1 billion. Although the purchase price was 42% less than the original agreement, the market generally considered it a “mutually beneficial” transaction, as seen from the reactions of both parties’ stock prices and fund flows.

In recent years, Baidu has been transitioning from search advertising to AI technology services, riding on the wave of AI. Baidu‘s 2024 financial report shows that its core business’s online marketing revenue fell by 7% year-on-year, while intelligent cloud revenue increased by 26% year-on-year. The daily call volume of the Wenxin large model reached 1.65 billion times, a 33-fold increase from 2023.

After the transaction is completed, the $1.6 billion that Baidu previously deposited in a trust account will be released and used for investment in cloud computing and artificial intelligence (AI) infrastructure. This arrangement not only allows Baidu to avoid long-term litigation risks, but also turns “dead money” into technology investment.

At the same time, the commercialization of AI technology still needs scenario support, and the acquisition of YY Live may provide Baidu with content ecosystem supplementation and data and scenario synergy.

For YY Live’s parent company, Joyy Inc., this transaction is also an opportunity to optimize its capital structure.

YY Live was born in 2008, initially as YY Voice, and created the show live broadcast mode with innovative features such as virtual gifts and connected microphones. In 2016, its paid users peaked at 7 million, becoming a benchmark platform in the industry. However, with the rise of Huya and Douyu in the game live broadcast field, and the crossover entry into the live broadcast market by Douyin and Kuaishou, competition has become increasingly fierce, and the number of paid users of YY Live has declined, and its position in the market has gradually marginalized.

From 2018 to 2020, the net income of YY Live was 10.273 billion yuan, 10.963 billion yuan, and 9.95 billion yuan respectively; the net profit was 3.289 billion yuan, 3.701 billion yuan, and 3.141 billion yuan respectively. When it was announced for sale to Baidu in 2020, YY Live’s net income and net profit had already shown a significant decline.

In the third quarter of 2024, Joyy Inc.’s live broadcast revenue decreased by 11.35% year-on-year to $439.5 million. In contrast, Joyy’s overseas business BIGO segment (including Bigo Live, Likee, etc.), according to Jiemian News, had revenue of $496 million in the third quarter of 2024, a year-on-year increase of 2.1%, of which the revenue growth rate in developed markets reached 21.6%.

In recent years, domestic regulations on the live broadcast industry have become increasingly strict, and a series of policies such as real-name system, reward limit, and protection of minors have been introduced. After stripping off YY Live, Joyy Inc. can concentrate more resources on high-potential regions such as the Middle East and developed countries to further expand overseas markets, which is also beneficial for maintaining its valuation in the U.S. stock market.

In overseas markets, the rapid development of TikTok, YouTube Shorts, and others in the short video field is constantly squeezing Likee’s market space. From 2019 to the present, Likee’s monthly active users (MAU) have dropped from over 100 million to tens of millions. Bigo Live also faces cross-border competition from social platforms such as Bumble and Tinder, and the market competition is becoming increasingly fierce. Recently, the U.S. Foreign Investment Committee (CFIUS) has increased its review of social apps with Chinese investment backgrounds, which may also restrict Joyy Inc.’s overseas expansion pace and bring many uncertainties to its future development.

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