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Youku revenue in first quarter doubled

Updated: 2012-05-18 21:15
By Zheng Yangpeng ( chinadaily.com.cn)

Youku.com Inc, China's largest online video provider, saw its net revenue more than double in the first quarter of the year, while its merger with the second largest video site in the country, tudou.com, is to be completed in the third quarter.

In the first quarter of 2012, Youku's net revenue increased by 111 percent year-on-year to reach 270.2 million yuan ($42.9 million), the company's fifth quarter of straight growth seen since the start of 2011, according to the company's latest financial report, which was issued on Friday.

But the company is still running a deficit, having a gross loss of 22.6 million yuan ($3.6 million) in the first quarter of the year. In the same period of 2011, the company showed a gross profit of 14 million yuan.

Besides spending more on content copyrights, the company blamed the loss mainly on a change in the way it accounts for the cost of content.

As a result, the company's expenditures on content increased to 140 million yuan in the first quarter, or 52 percent of its net revenue. In the same period of last year, the proportion had been 28 percent.

The financial report also said that the merger of youku and tudou will be completed in the third quarter of this year.

Youku surprised the markets in March by buying its main rival, Tudou Holdings Ltd, which has the second-largest share of the Chinese online video market. On April 18, the two websites' use account became interchangeable.

Youku said the merger will reduce its costs by $50 million, saying the deal will give it a stronger bargaining position and thus make it more able to get content cheaply and increase its ad prices.

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