(Yicai) Jan. 2 -- Chinese tech giant Baidu has scrapped its plan to buy the Chinese livestreaming business of Joyy Group for USD3.6 billion.

Baidu's affiliate firm Moon SPV terminated the agreement to buy YY Live because the closing conditions were not fully met as of Dec. 31, Beijing-based Baidu said in a filing to the Hong Kong Stock Exchange late yesterday.

The termination of the deal is a normal move and will not affect YY Live's operation, industry analysts believe.

Moon and Joyy signed the purchasing agreement on Nov. 16, 2020.

Baidu values YY Live's mature live broadcast system, an executive at the tech giant said back then. Baidu tried to build its own broadcasting platform but faced some difficulties, the executive added, noting that with the introduction of YY Live's technology, content, and team, the firm may make up for its shortcomings and increase traffic.

"This transaction will connect YY Live's livestreaming business to Baidu's traffic pool, realizing diversified monetization in a larger ecosystem and accelerating business growth," Li Xueling, chairman and chief executive officer of Joyy, said at the time.

YY Live is a veteran in the Chinese livestreaming industry, having launched voice software in 2008. However, it has been facing losses and shrinking traffic since the beginning of 2020 because of the growth in popularity of short-video platforms, such as Kuaishou and Douyin.

After reaching an agreement with Baidu to sell its Chinese livestreaming business, Joyy began to focus on overseas markets. In the third quarter of last year, revenue from Bigo, Joyy's overseas livestreaming platform, accounts for more than 80% of the company's total revenue, according to the company's latest earnings report.

In recent years, Baidu has shifted its focus to artificial intelligence. Founder and Chief Executive Officer Robin Li said many times last year that Baidu wants to be the first company to reconstruct all products with AI.

Editor: Futura Costaglione