“Yes, it felt weird,” summerizes Tudou-founder Marc van der Chijs the decision in March to merge with rival Youku, the numbers one and two on China’s competitive video hosting market. But it was the right way to go forward, he tells The Pandodaily.
In the seven years since [since their start], Tudou, like Youku, has grown into a major media channel, producing original content as well as benefiting from hosting its fair share of pirated TV shows and films. Youku, which launched in June 2006, has a very similar offering but would ultimately become the leader, claiming about 22 percent market share to Tudou’s 13 percent. In February 2010, the two agreed to share original content in a combined effort to stave off outside competition.
As part of the $1.1 billion merger, Youku agreed to acquire Tudou to form Youku Tudou Inc. (Update: A reader has pointed out that the name, amusingly, translates to “Excellent Cool Potato”). Together, they will be gigantic. Each site claims 250 million to 300 million unique monthly users, and they own a third of the online video market, which, like most Internet sectors in China, is very fragmented. Baidu’s iQiyi and Ku6 are among the other major players in the space…
So you can imagine Van der Chijs’ mixed emotions. But then, he’s quick to see the upside, and, as a shareholder, he no doubt enjoyed the benefits of the pop in Tudou’s share price, which tripled on news of the announcement. Van der Chijs, who was careful not to discuss stock information while the merger is still being finalized, is optimistic for the future of the new company. “I think Tudou and Youku together can actually do a lot more than Tudou could alone and Youku did alone,” he said. “So although it feels a bit weird, I really think it’s the right decision.”