After years of fierce competition, online video giants Youku and Tudou are joining forces to create a single service to be called Youku Tudou Inc. in a deal estimated to be worth over $1 billion. For those unfamiliar with the Chinese online video scene, Jon Russell of TheNextWeb describes the deal as being “akin to a merger between YouTube and VEVO.” Youku and Tudou are China’s biggest online video sites and together they account for over 35 percent of the Chinese online video market.
Founder, chairman and CEO of Youku, Victor Koo, who will serve as head of the new company, had this to say:
We intend to lead the next phase of online video development in China. Youku Tudou Inc. will represent a differentiated leader in the online video market in China with the largest user base, most comprehensive content library, most advanced bandwidth infrastructure and strongest monetization capability within the sector.
Founder, chairman and CEO of Tudou, Gary Wang, who will join the new entity’s board of directors, had the following to say of the merger:
Youku and Tudou share a vision for the future of online video in Chine and how to deliver the best user experience possible. This transaction further strengthens our market position as Tudou brigs its valuable brand, library of professional licensed content, user generated content platform, extensive user base, broad range of partnerships and expertise in mobile video.
Together, we believe Youku Tudou Inc. will be able to provide the best-in-class experience for users interested in uploading, watching and sharing videos, and to grow together with our advertisers, and our content and industry partners.
This merger may come as a surprise to those who have been following the two Chinese online video giants. Reuters reports that, “The two firms have sparred publicly in recent months, with Youku filing a lawsuit against Tudou earlier this year seeking 4.8 million yuan ($762,000) in compensation, saying it incurred losses because of claims by its smaller rival that Youku had misused copyrighted material.”
It looks like Youku and Tudou have set their differences aside to forge ahead into the future of Chinese online video together. What do you think about this news? We’d love to hear your thoughts in the comments below.
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Megan O’Neill is the resident web video enthusiast here at Social Times. Megan covers everything from the latest viral videos to online video news and tips, and has a passion for bizarre, original and revolutionary content and ideas.