Bottom line: Youku Tudou’s new name and campaign to create more exclusive content look like good strategic moves, but it really needs to sell itself to a larger benefactor to ensure its longer-term future.
Youku Tudou (NYSE: YOKU) was once China’s top online video site when it was formed 3 years ago through the merger of the country’s 2 leading players. But those glory days are firmly in the past now, as the company has been overtaken by more aggressive names like LeTV (Shenzhen: 300104) and iQiyi, the service backed by cash-rich online search giant Baidu (Nasdaq: BIDU).
Now media are reporting that Youku Tudou is rolling out a major overhaul that will include a new name for the company, as well as a massive spending campaign to build up an ecosystem for creating its own video content. The campaign certainly seems interesting and long overdue. But I’ve argued for a while now and still believe that what Youku Tudou really needs is to consider selling itself to a stronger Internet partner, rather than trying to continue as an independent company. Read Full Post…
scandal involving bogus vendors who defrauded buyers, resulting in the resignation of its CEO and COO. Chinese media are saying the report may be payback for China’s hard line towards Google (Nasdaq: GOOG) and other western Web firms in China. But regardless, investors might be well advised to avoid any Alibaba companies and also Baidu until the dust settles on this one. Investors in Yahoo (Nasdaq: YHOO), whose stake in Alibaba is one of its most lucrative assets, might also take note.
