Jefferies & Company Expert Sees M&A Pace Accelerating in Chinese Mobile Internet Sector: A Wall Street Transcript Interview with Cynthia Meng, Managing Director and Head of HK/China Telecommunications, Technology and Media Equity Research

Wall Street Transcript

67 WALL STREET, New York - October 22, 2013 - The Wall Street Transcript has just published its Internet Services Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Increased Mobile Content Traffic - Chinese Online Monetization Trends - Internet Infrastructure Build - Enterprise Adoption of Cloud Computing

Companies include: Baidu, Inc. (BIDU), Sina Corp. (SINA) and many others.

In the following excerpt from the Internet Services Report, an experienced China media and telcom analyst discusses her outlook for the sector for investors:

TWST: How are Chinese Internet companies adapting to the shift to mobile? Are there any examples from your group of a particularly inventive adaptation to mobile?

Ms. Meng: This year mobile transition is a very big theme for all the Internet companies in China. The big companies, Tencent (0700.HK), Baidu (BIDU), Alibaba and Qihoo (QIHU), are all actively trying to position themselves in mobile. We are also seeing in the industry lot of merger and acquisition activities, for example the recently announced investments in 91 Wireless by Baidu. 91 Wireless is a wireless, Android-based mobile application store. The deal is aimed to help enhance with the mobile presence of Baidu.

Also, there's the recent acquisition of Nuomi, a social commerce group buy company owned previously by Renren (RENN), and that's sold to Baidu. It's a small acquisition for Baidu. There are a couple of other deals involving minority stake investments this year, involving SINA (SINA), Autonavi (AMAP), etc., all designed to enhance the mobile presence by the big companies I just mentioned.

Tencent in particular, they didn't make much acquisition because they are very well-positioned, just started monetizing the mobile Facebook (FB) product, WeChat, since August. So mobile game is introduced, and the emotion icons or stickers are being sold to WeChat users. In addition, WeChat users are able to do mobile commerce and have location-based promotion information since August. Sina Weibo started to monetize social commerce through jointly developed advertising products with Alibaba in 2Q13.

These are the things that the Chinese Internet companies are actively either doing to position themselves well in terms of mobile transition or they are doing to find ways to monetize from mobile Internet, including mobile games, the selling of stickers, mobile CRM solutions for small and midsized businesses, and mobile search. For Baidu...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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