Youku and Tudou, two of the largest online video providers in China, will be merging to form a new company Youku Tudou Inc. See here a video report from Newsy:
Embedded Video Source by Newsy.com
Transcript by Newsy
BY ZAKIYYAH WAHAB
ANCHOR CHRISTINA HARTMAN
You’re watching multisource global video news analysis from Newsy.
Once rivals, now comrades. Youku and Tudou, two of the leading online video providers in China, have announced a merger. The new company will be named Youku Tudou Incorporated. International Business Times has more.
“…China’s top two online video companies are joining forces, with Youku.com buying smaller rival Tudou Holdings Ltd in an all-stock deal worth over $1 billion…”
The news spurred a rise in share prices for the two companies. According to CNN Money…
Tudou’s shares surged 156% in early trading, while Youku’s shares jumped 25%. The news also boosted shares of other Chinese Internet companies, including a 4% rise in shares of SINA Corporation, the parent company of China’s version of Twitter, Weibo.
The deal is expected to end a fierce legal battle over copyright infringement issues between the two companies. The Financial Times quotes founder and chief executive of Youku, Victor Koo, who expects…
“…significant synergies across a number of areas including leveraging licensed content over a larger user base and realising efficiencies in bandwidth management and other common expenses…”
According to Tech in Asia — Youku Tudou Incorporated will be a formidable challenge to domestic online players in the Chinese media domain.
Tudou and Youku accounted for nearly half of the entire video market last year. When combined, the new single company will occupy for 49% of market shares in online video market share in China.
But Shanghaiist notes — netizens in China will find the merge more convenient to stream online videos. The blog suggests the move will provide…
“…a single web destination that combines a huge cache of content, licensed, unlicensed, amateur and otherwise.”
The deal is subject to approval from shareholders and is expected to close by the third quarter of 2012.
Transcript by Newsy.
(Image source: newsy, China Daily)