Alpha Resource Partners reports Alibaba and a partner have acquired a significant stake in Youku Tudou, an online video platform similar to YouTube.
Shenzhen, China., May 1, 2014 - (PressReleasePoint) - Alpha Resource Partners: Alibaba Group and a private equity company established by its Chairman, Jack Ma has acquired a near-20% stake in Youku Tudou Inc. for $1.22 billion. The news confirms that the Chinese e-commerce giant, which last week filed its initial IPO documentation with the US’s Securities and Exchange Commission, is committed to beefing up its online video business to better compete with its main Chinese rival, Tencent Holdings.The deal underscores the growing rivalry between China's two Internet giants - Alibaba and Tencent Holdings Ltd - as they attack each other’s turf. Alibaba's Youku Tudou stake is the latest in a spate of major media acquisitions by the company in recent months and takes Alibaba's asset buying spree to nigh on $4 billion in the last 6 months.
"The battle between these two internet giants is heating up and it seems that neither wants to run the risk of being under-represented in any market sector where the other has a presence," said an Alpha Resource Partners analyst.
Youku Todou provides online video content in a manner similar to that of YouTube and it is believed that it will offer stiff competition to Tencent’s online video offerings.
“These two companies are more or less carving up China’s internet users between them and the battle is not over by a long shot. Alibaba’s US-listed IPO will raise $15 billion cash adding to an already substantial war chest that is capable of financing some pretty big deals as it stands at the moment,” said the Alpha Resource Partners analyst.
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