Cheetah Mobile Inc (ADR) (NYSE:CMCM) and Bytedance have announced a joint partnership through which they aim to strategically provide tailored content delivery services.
The two companies made the announcement on November 8 revealing that they are working together to strategically working on a framework agreement. The joint partnership will work towards integrating the personalized content delivery services from Bytedance with Cheetah Mobile’s services so that customers will have easier access. The partnership will facilitate the delivery of services into a global market while enhancing Cheetah Mobile’s capacity to enhance the monetization of its utility products.
The partnership will also allow Bytedance to get into a definitive agreement through which it will acquire News Republic, an aggregating service operator for global news. News Republic is currently owned by Cheetah Mobile and the estimated value of its acquisition by Bytedance is estimated at $86.6 million. Cheetah Mobile may, however, choose to receive $50 million worth of Bytedance shares as part of the sale. The transaction talks are still going on and are still subject to closing conditions. News Republic will become a subsidiary of Bytedance once the acquisition is complete.
“Cheetah Mobile is a Chinese Internet company with the best track record in overseas expansion. We have a strong DNA in globalization. Bytedance owns China’s largest content platform, and has cutting-edge machine learning capabilities and content delivery technologies,” stated Bytedance founder and CEO, Yiming Zhang.
Mr. Zhang further pointed out that the strategic partnership will allow Cheetah Mobile to speed up the pace at which Bytedance executes its content strategy, especially in overseas markets as well as working on providing mutual benefits for both companies. They will also work towards providing a diverse offering while still maintaining relevant content to its global user base.
Both the definitive agreement as well as the joint partnership are expected to strengthen the relationship between Cheetah Mobile and Bytedance. It also highlights the desire by the two companies to pursue new growth opportunities while also making sure that the existing customers continue to receive the best services.
Cheetah Mobile stock closed the latest trading session on Wednesday at $11.40.