An image to mark the occasion of the Youku Tudou merger, though YouTudo is not the confirmed name for the new video portal. (h/t @niubi).
Well, slug us with a sideways shovel six ways from Sunday! Youku and Tudou have just announced that they will be merging into a single company today, in an agreement that would see the two companies engage in a 100 percent stock-for-stock transaction. The marriage between the two online video giants results in a new (and unimaginatively titled) entity called Youku Tudou Inc. The move means netizens in China now have a single web destination that combines a huge cache of content, licensed, unlicensed, amateur and otherwise.
According to a pie chart from Tech in Asia, the new deal means that a single company will have a full 49 percent of the online video market share in China.
Founder, Chairman and CEO of Youku Victor Koo says of the blockbuster merger:
“We intend to lead the next phase of online video development in China. Youku Tudou Inc. will represent a differentiated leader in the online video market in China with the largest user base, most comprehensive content library, most advanced bandwidth infrastructure and strongest monetization capability within the sector.
Youku Tudou Inc. will have the reach and scale to bring our users high quality content at high speeds. The combined company will have the two leading online video brands in China: Youku and Tudou.”
Koo also uttered technospeak about Tudou retaining its “distinct brand identity” (which to us has always meant a black-and-orange color scheme and more streaming difficulties), as well as bizspeak about improvements in the “industry structure and the underlying economics of the online video sector in China,” “synergies leveraging licensed content over a larger user base” and “realizing efficiencies in bandwidth management and other common expenses.”
Meanwhile, Koo’s counterpart at Tudou Gary Wang issued similar statements on the merger, citing the two companies’ aim of delivering the best user experience possible:
“This transaction further strengthens our market position as Tudou brings its valuable brand, library of professional licensed content, user generated content platform, extensive user base, broad range of partnerships and expertise in mobile video.
Together, we believe Youku Tudou Inc. will be able to provide the best-in-class experience for users interested in uploading, watching and sharing videos, and to grow together with our advertisers, and our content and industry partners.”
What is the world coming to? Time was when two major rivals for giant metaphorical brass rings would hate each other’s guts and expend financial resources to get ahead of the competition. Nowadays, Lebron wants to join Dwyane Wade rather than play against him, and Chinese online video concerns want to hold hands rather than flip each other the bird.
Twitter is predictably abuzz over the deal:
Big: Youku and Tudou are merging into Youku Tudou. $yoku $tudo. The inevitable consolidation of China’s online video space is underway.
— Gady Epstein (@gadyepstein) March 12, 2012
Have to believe $yoku buy of $tudo was at least quietly blessed by SARFT. Hard to believe regulators will NOT want a say in this.
— David Wolf (@wolfgroupasia) March 12, 2012
Youku Tudou merger was approved only after SARFT was assured that hong bao allotments would be protected from cost-cutting synergies.
— The Relevant Organs (@relevantorgans) March 12, 2012
Best remark on Youku & Tudou merge: “Good for Tencent! Now Tencent Video becomes the second biggest in China without doing anything!”
— Kane Gao (@Chassit) March 12, 2012
For full terms of the deal, click here.