Youku Tudou outlines vision for merged company

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Youku Tudou Inc, China's biggest online video provider, is stepping up efforts to manage its two online video websites after a merger that combined the two biggest web-video competitors into a single company.

The newly merged company plans to keep Youku.com and Tudou.com as distinct players to target different kinds of users, an effort that comes amid some analysts' doubt about whether the merger can bear fruit as the company expects.

Tudou.com will position itself as a video website for "fashion" and "youth", while Youku will be more of a "mainstream" online-video provider, the company said on Wednesday. It was the first time the company talked about its strategic plans since the merger was finalized last month.

Tudou.com will present its new homepage and provide a series of self-produced entertainment programs, among other efforts to emphasize its brand positioning, in the coming three months, said Yu Zhou, Tudou's chief strategy officer.

Youku and Tudou used to be the two biggest players in the market. However, when measured by revenue, Tudou dropped out of the top three in the second quarter.

Youku had 21.5 percent of the online video market in China in the quarter, followed by Iqiyi.com's 10.2 percent and Sohu.com’s 9.8 percent, according to the domestic research company Analysys International. Tudou ranked fourth with 8.6 percent.

It is still unknown whether the merger can make the new company bigger than Youku and Tudou combined, analysts said.

The annual growth rate of Tudou's net revenue dropped from 77 percent in the first quarter to 47 percent last quarter, according to its financial report.

Tudou's growth slowdown may be partly due to advertisers' weakening appetite for it, giving rise to worries over whether the two companies can distinguish themselves well after the merger, said Qiu Lin, an Internet stock analyst at Guosen Securities. "The biggest benefit is just that Youku has eliminated a major rival."

Youku Tudou, however, said only 14 percent of the two websites' users are overlapped on a daily basis, hinting that the two websites can grow as distinct players.

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Nelly Min is an editor at China Daily with more than 10 years of experience as a newspaper editor and photographer. She has worked at major newspapers in the U.S., including the Los Angeles Times and the Detroit Free Press. She is also fluent in Korean.