| With the trend of economic globalization, more and more enterprises begin to realize that they cannot cope with the increasingly fierce market competition just relying on their own strength no matter how abundant their resources and how large their scales. Mergers and acquisitions have become an important way for the enterprises to seek survival and realize the expansion for a better development. After China joins WTO, Chinese enterprises have been gradually integrated into the world economy, while the competition between enterprises is increasingly fierce and product lifecycle is enormously shortened. It is the source of enterprise development to maintain a lasting competitive advantage.The network video industry in China began in2005; the merger of Youku and Tudou opened the prelude to the integration of this industry. With growing users our online video industry has optimistic prospect and at the same time the rise of mobile technology provides a good market environment for the development of the network video business. There still exist many problems in the network video industry, such as huge financial pressure burdened by most video sites, serious content homogenization and the high cost of copyright. In addition, more than70%income of the video website comes from the advertising and this single business model leads that most network video websites have a great deficit. Therefore, it is imperative to promote mergers between enterprises to reduce the cost of network video websites and seek new development opportunities. Williamson first put forward the welfare tradeoff analysis model of horizontal mergers, and then many scholars has improved the model both in theory and practice. This paper also carries out a summary. The author draws on Williamson welfare trade-off theory, and carries on the analysis according to the bilateral market characteristics of network video industry. Bilateral market refers that the two groups of participants need to conduct transactions through the middle platform, and the returns of one group depend on the number of users or participants in the other group. Therefore, the Williamson model is extended and the three actors namely network operators, video viewers and advertisers are considered to analyze the social welfare.The analysis of network operators focuses on synergistic effects which can be classified into operating synergy, management synergy and financial synergy. Whether advertising price is raised by the network operators is the main task to analyze the welfare of the advertisers. On the user side, this paper uses mathematical model to compare user utility before the merger with that after the integration in order to determine the welfare changes.Merger of Youku and Tudou is a significant case in network video industry. The author hopes that we can illustrate the M&A integration prospects and provide the basis for subsequent network video business through analyzing data of costs, net income and expenses.This paper is divided into six parts. The first part introduces the research background and elaborates the research significance and the innovation of this article. The second part is the theory, as they are mainly the horizontal M&A theory and Williamson model. Because the network video industry is a two-sided market, the Williamson model is expanded in the welfare analysis. The third part illustrates the present situation and future trend of development about the network video industry. The network video industry has experienced five stages of development and then entered into integration period. The number of users is increasing and meanwhile the size of market is gradually expanding, but the profit model is too deficient that most enterprises have great loss. The fourth part is the core chapter which includes the welfare analysis of the network video operators, advertisers and users. Firstly, it states the operating synergy, management synergy and financial synergy effect of network operators; then the mathematical model is adopted to measure the changes of advertising prices; finally, this part analyzes the consumer welfare from the price, content diversity and viewing convenience.The fifth part is about the merger case of Youku and Tudou, which provides positive guide for the network video websites. The sixth part put forward conclusion. |
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