Sun, Nov 08, 2015 - Page 13 News List

Alibaba to buy Youku Tudou in US$4.8bn deal


Alibaba Group Holding Ltd (阿里巴巴) on Friday agreed to buy video service Youku Tudou Inc (優酷土豆) in a deal said to be valued at US$4.8 billion, as billionaire Jack Ma (馬雲) seeks to stream more content to Chinese Internet users through control of the YouTube-like Web site.

Alibaba, China’s biggest online shopping company, raised its offer to US$27.60 per share in cash from US$26.60 last month. The new price is 35 percent greater than Youku’s stock price the day before the initial bid was disclosed.

Youku’s board has approved the merger agreement, Alibaba, which already owned a minority stake in the company, said in a statement.

Full ownership of Youku would help Ma deliver US films and drama series to more than a third of China’s population as Alibaba competes with Baidu Inc (百度) and Tencent Holdings Ltd (騰訊) for the attention of Internet users.

“The move into digital media makes a lot of sense,” Stamford, Connecticut-based MKM Partners analyst Rob Sanderson said. “The rise of Internet video is really undeniable around the world, so I think it’s a strategy that could produce quite a bit of leverage given the size of their communities.”

Youku and Tencent’s video sites both had about 286 million unique visitors in August, yet viewers spent more time watching content on Youku, according to data compiled by Bloomberg. Baidu’s IQiyi had 273 million visitors.

More than 461 million people in China consumed video online as of June, with 354 million users — more than the entire population of the US — accessing from smartphones, according to the China Internet Network Information Center.

Alibaba’s shares fell 2.1 percent to US$83.61 at the close in New York, reversing earlier gains after CNBC reported that Kynikos Associates LP founder Jim Chanos said investors should be bearish on the stock and recommended it as a short-sale trade. Youku shares jumped by 7.3 percent to US$26.14.

Victor Koo (古永鏘) is to remain as chairman and chief executive officer of Youku, which has never posted a profit since its 2010 initial public offering, and is zeroing in on US studios for programming.

This story has been viewed 1496 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top