[Update, 08/22 – Hours after publishing, this deal was confirmed. I’ve updated the title, but I’ll leave the story as is…]
Rumors in the tech industry in China suggest that Sina has signed an investment agreement with the newly IPO’d video-sharing site Tudou.com (NASDAQ: TUDO), and will receive about four percent of Tudou’s shares. That values Sina’s stake in Tudou at US$40 million.
Tudou’s leadership was in New York last week where they saw their company raise $174 million on its NASDAQ debut, and become valued at $2.8 billion. But its shares subsequently slumped somewhat, closing at $19.24 per share before the weekend, down from its $24 opener.
The rumor states that the deal was done between Sina and Tudou on Friday, with the agreement made at that $19.24 price point. It’s not clear if Sina’s investment might mean some strategic cooperation in terms of content or video-hosting.
Sina, like every web portal worth its salt, has a video site of its own – at video.sina.com.cn – but it is nowhere near as trafficked as Tudou, which is China’s second-largest video site. Also, Sina Video does not support user uploads.
In Sina’s most recent earnings call last week – where it appeared that the company’s spending on its popular Weibo microblogging platform had hurt income levels in Q2 – CEO Charles Chao said that he wanted Sina to be a “complete media platform,” and – most pertinently for this rumor – said that “We do not rule out investment in other video companies and the possibility to conclude strategic partnerships.”
A Tudou-Sina tie-up, however small, could help Tudou to pay for content and bandwidth in its battle against Youku. The halo effect around Sina’s Weibo could also help bring in advertisers to Tudou.
[Source: Techweb – article in Chinese]
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