Tudou

The YouTube of China is more than just cat videos

November 9, 2010: 3:00 AM ET

Youku wants to be the premier online video source for China, sure. But it's also something like Hulu and a movie studio. Maybe that's why Goldman Sachs is about to underwrite its IPO.

By Bill Powell, contributor

Viktor Koo is as about as matter of fact as it's possible to be when he describes the audacious goal he has set for a company that he founded just four years ago. "We want to be the primary source of video content [delivered] across Internet-enabled devices." Given that he sits in China, the country that already has the most Internet users in the world (384 million, with roughly 240 million of them already accessing video via the Internet), that would presumably be a pretty valuable piece of cyberspace to occupy. Which is why investment bankers at Goldman Sachs (GS) are in the final stages of preparing an initial public offering of Youku's stock in the U.S. that is, according to one Wall Street source not working on the deal, imminent. (Koo, in an interview with Fortune, declined to confirm or deny that an an IPO is planned.)

Audacious Koo's goal may be—but it's not necessarily unrealistic. A Hong Kong native, graduate of Berkeley and the Stanford Graduate School of Business, and an alum of Bain & Co.—Koo is the founder of Youku.com, the Beijing based company that is typically--and perhaps not quite accurately -- described as the "YouTube' of China. It is, as of now, the leading online video company in China, with a market share of 42 per cent, (as measured by user time spent on video sites in China, according to Itracker.com, a market research firm.) Its principal rival, Tudou.com, has about a 25 per cent share of the market, and it too will go public in New York, either this quarter or next, sources say. (Both companies are now in the so-called quiet period before IPOs and thus can't confirm timing.)

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