The online video business in China is seeing explosive growth, as Chinese consumers learn how to capture and watch video and as Chinese advertisers seek to boost their branding. Several several emerging Chinese companies are scrambling to exploit it — so far, few U.S. companies are there.
Baidu, the leading Chinese search engine company, said today it has raised $50 million from private equity firm Providence Equity Partners to pump into Baidu’s new online video unit. The unit, a separate corporate entity called Qiyi, is licensing premium video content and running ads beside it online. Baidu will maintain majority ownership of the company. Baidu is hoping to use its search engine prowess to drive traffic to the new company, much like Google has featured links to the videos hosted by its video company, YouTube.
It comes at a time when China’s leading online video company Youku is boasting impressive growth with its own premium video advertising business. The company’s chief executive, Victor Koo, visited the U.S. this week to meet with bankers as he begins to prepare the groundwork for a possible initial public offering over the next few years. Youku generated about 28 million in gross revenue last year, he said. This comes mostly from advertising on its premium content videos (you subtract about 20 percent of that for agency rebates, leaving about $22 million in net revenue). He expects revenue to at least double this year, and then to double again in 2011.
To read the full, original article click on this link: Baidu raises $50M to exploit China’s online video explosion | VentureBeat
Author: Matt Marshall
