Prospering from China’s internal push to alleviate domestic companies and make them competitive enough to succeed internationally, Tudou, China’s second largest video websites, is preparing an initial public offering on the Nasdaq exchange within the next six months with hopes of raising US$100~150 million, amid fierce competition in the sector.
The first Chinese internet video site to go public, Tudou is backed by a number of venture capital firms, including Singapore’s Temasek. The IPO comes as China’s state media are muscling into the country’s Rmb4 billion (US$601 million) internet video industry, which has so far been dominated by privately owned groups. Tencent and Baidu, China’s two largest internet companies, Including government owned media companies such as CCTV China’s main state broadcaster, and a number of provincial government-owned broadcasters have all started online video services.
Tudou, China’s answer to youtube has announced that the money raised will be spent on beefing up the company’s infrastructure and content in order to counter new competitors. In the medium term, Tudou wants to transform itself from a video distribution platform into a full media company. The main effort will be in-house production of content. The company also launched its first self-produced online video drama in September. In August, the online video company raised US$50 million in a private placement with Temasek, accounting for US$35 million.
Optimistic over big ticket IPO’s in the region Including India’s Coal India and China’s Agricultural Bank, analysts are buoyant on the Tudou IPO, “the IPO will strengthen Tudou in the current fierce competition in the Chinese internet video market,” said Tang Yizhi, a researcher at Analysys in Beijing.