Focus on Consolidation Deals in China
After yesterday's news that China's Youku (YOKU) and Tudou (TUDO) would merge, many of the other Chinese Internet names got a boost. The thinking seems to be: If Tudou can get bought, why not another smaller Chinese company?
But let's take a step back and look at what happened in the merger between the two online video companies. Both Tudou and Youku have been losing money for some time, spending enormous amounts on acquiring new content and paying for bandwidth costs. Each had raised so much capital and spent it that they had few other competitors in the space. Even though Baidu (BIDU) has an offering and the other larger Chinese portals, such as Sohu (SOHU), have video sites as well, these two pure-play online video sites have a clear market-share lead....385 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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