Chinese tech giant Tencent and short video platform Kuaishou are negotiating about how the two are going to collaborate. It is most likely that the two will start a joint venture targeting the gaming industry, according to LatePost.
Products of the new company could include live streaming, short videos or online communities. Kuaishou and Tencent’s own short video app Weishi will each keep their own products while operating independently.
What Kuaishou, or Kwai in the overseas market, can get is Tencent’s traffic, via access to WeChat’s Top Stories, where stories get exposure. Kuaishou will help shape products of the new company as an exchange.
“What Tencent values most is Kuaishou’s products and algorithms. From the results we can tell that PCG’s product ability can’t compete against Kuaishou’s,” said a person familiar with the deal.
Within Tencent, Platform & Content Group (PCG), Interactive Entertainment Group (IEG) and Corporate & Development Group (CDG) are taking part in this discussion. PCG wants to lead the new company, so that PCG’s products can be improved with Kuaishou’s experience in product development and algorithms. IEG hopes to provide gaming IP and distribution channels for the new company, while CDG, leader of this negotiation, values the joint venture’s future and return on investment.