Chinese web giant plots expansion

30 July 2009

BEIJING: Youku, China's biggest online video-sharing platform, is adopting a variety of different strategies as it seeks to boost its advertising revenues and consumer usage levels both on the web and via mobile phones.

The service was founded three years ago, and currently receives 25 million visitors a day, with this group of users playing back 100 million hours worth of content in May, according to figures from iResearch, the consultancy.

Overall, Youku, which competes with rivals such as Tudou and, accounted for over 50% of the total amount of time Chinese consumers spent watching material on video-sharing portals in the fifth month of this year.

Currently, it has more than 250 advertisers, including major multinationals such as Audi, the automaker, Coca-Cola, the soft drinks manufacturer, and Lenovo, the IT company.

Victor Koo, Youku's ceo, argued it is "on the path to profitability," with its main objective being to attract marketers who typically invest the vast majority of their budgets on television, the country's biggest advertising channel.

"We're trying to get advertisers to see us as what we are, which is internet TV. That is still, I think, a work in progress," he said.

Having originally set a revenue target of 100 million yuan ($14.7m; €10.4m; £8.9m) for 2009 as a whole, Koo now expects the portal to perform above this level.

Among the options available to brands using its services are pre-roll ads, executions which appear when a video is paused or stopped, and spots which are run during more conventional ad breaks included in professionally-produced shows featured online.

The company has also partnered with Google, the US internet pioneer, and Baidu, the number one search engine in China, both of which place ads alongside its search results.

Other recent initiatives include charging consumers who are selling products on Taobao, a web-based auction property similar to eBay, to feature video clips from Youku in their product listings.

On mobile, it has forged deals with China Mobile, China Telecom and China Unicom, developed an iPhone-friendly site, and engaged in talks with Nokia and Sony Ericsson about the possibility of adding "apps" to their phones.

Recently, announced it is planning to give content creators the opportunity to charge their fellow netizens to access the videos they make, with any resultant revenues being divided between the website and the individual concerned.

Data sourced from IDG News; additional content by WARC staff