Alibaba Has Acquired 16.5% Stake in Chinese Video Service Youku-Tudou
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Photo Credit: PR

Alibaba Group and Yunfeng Capital, the venture capital firm co-founded by Alibaba founder Jack Ma, have bought USD1.22 billion worth of shares in Chinese online video service Youku-Tudou

Photo Credit: PR

Photo Credit: PR

By Tracey Xiang

Alibaba Group and Yunfeng Capital, the venture capital firm co-founded by Alibaba founder Jack Ma, have bought USD1.22 billion worth of shares in Chinese online video service Youku-Tudou.

Alibaba now holds a 16.5% stake in one of the largest online video platforms and Yunfeng holds 2%. Jonathan Lu (aka. Lu Zhaoxi), CEO of Alibaba Group, will join Youku-Tudou’s board.

Chinese giants continue to battle for sector dominance

Youku-Tudou reportedly was earlier in talks with other Chinese Internet giants including Tencent on similar investment deals. After a wave of consolidation in China’s online video market (the few existing ones) with a majority of content overlapping with one another and advertising as a major revenue source, are now figuring out ways to differentiate themselves from competitors and to keep up growth rates – such as producing original content. LeTV has become a well-known smart TV brand that hopefully will convert its online video users to smart device consumers, or vice versa. iQiyi has introduced investment from Chinese search giant Baidu who has been channeling search traffic to it. iQiyi bought a lot of exclusive content this year so that, as reported, metrics will look better when it launches the expected IPO. Youku-Tudou, although having been one of the leading players, doesn’t seem to have a big edge over others. It is reported that Tencent offered up the access to WeChat users, but it turns out Youku chose cash instead.

Online video platforms is one of the few Internet service categories Alibaba Group hasn’t tapped into. Over the past couple of years Alibaba has bought its way into various sectors outside e-commerce, having invested in microblogging service Sina Weibo, mapping service AutoNavi, digital content provider ChinaVision and a few others.  The company has just established a mobile search company, as announced today, together with UC Web, a mobile browser and service provider, whom which Alibaba also has a stake in.

This post was originally published on Technode

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About Technode


Technode (formerly known as MOBINODE) is the leading tech blog uncovering the latest news on start-up entrepreneurs, investors, large companies and industry trends in China and Asia. TechNode is the official partner of TechCrunch, managing TechCrunch China. Its focus is social media, mobile and e-commerce and new trends such as Big Data and augmented reality. Written in both English and Chinese TechNode aims to be the go-to source to discover original, insightful and opinionated content that helps connect the eco-system of entrepreneur’s, investors and consumers. TechNode is founded by Dr. Gang Lu , one of the most influential Chinese tech bloggers in global web industry. TechNode also organizes monthly events named TechNode Touch (TNT) in several cities in China, and it also leads ChinaBang Awards, an annual event rewards the best startups in China.

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