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October 25, 2010 11:41 pm
Tudou, one of China’s leading video websites, is preparing an initial public offering with hopes of raising at least $100m, amid fierce competition in the sector.
The company said it expected to complete the IPO on the Nasdaq exchange within the next six months – a schedule that would make it the first Chinese internet video site to go public.
Youku, the company’s main competitor, has indicated in the past that it aims to go public, but has declined to comment on timing and size of a potential IPO.
Both Credit Suisse and Deutsche Bank declined to comment.
The plan comes as China’s state media are muscling into the country’s Rmb4bn ($601m) internet video industry, which has so far been dominated by privately owned groups. Tencent and Baidu, China’s two largest internet companies, have also started online video services.
Behind Tudou and Youku, Ku6, a group that was recently acquired by Shanda, the internet gaming company, is the third-largest player.
“Going public is an unavoidable path for the Chinese internet video sites,” said Zhao Xufeng, an analyst at iResearch.
“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.
According to Analysys, revenues in the sector were worth Rmb621m in the third quarter, an increase of 148 per cent over the same period last year. The research house’s statistics show Youku as the market leader with about 17 per cent and Tudou as number two with about 13 per cent.
iResearch, another Beijing-based internet research firm, forecast the industry’s revenues to reach Rmb4bn for the full year.
Advertising accounts for most of the video sites’ revenues.
In August, Tudou raised $50m in a private placement with Temasek, the Singapore state investment fund, accounting for $35m.
Gary Wang, Tudou’s chief executive, told the Financial Times then that he intended to spend the money on the company’s infrastructure and more own content in order to counter new competitors.
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