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Chinese Video Companies Youku & Tudou Merge Over $1 Billion Deal

Sites include , , . Published on March 30th, 2012. Written by Anthony West.

Competition watchdogs in China don’t necessarily work the as they do in the States, and this fact makes for some interesting dealings in China’s tech sector.

Recently tow of the country’s biggest online video platforms merged in a deal worth over $1 billion. The deal that was struck between Youku and Tudou now see a new company formed called Youku Tudou Inc. This merger means that this new enterprise now controls more than 35% of China’s online video market.

The deal was put into perspective by Victor Koo, founder, chairman and CEO of Youku. According to Koo, 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”.

For many in the West, the deal was somewhat of a surprise, not least because the two companies were bitter rivals. It wasn’t uncommon to see open spats in the media between the two, and so for many, the joining of forces was the last thing anyone expected to see.

Perhaps the union was born out of concern for Youtube’s ever expanding reach globally. The web’s biggest video sharing network recently added over 19,000 Indian TV show episodes and it’s not hard to imagine that Chinese shows are next.

Do you think Youtube is getting ready to challenge players in the Chinese online video market? Share your thoughts below.

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