Tudou pumps recently raised $57M in bandwidth

Written on 12th May 2008                                                                                                              4 COMMENTS
Ernst-Jan Pfauth, editor in chief

Last Tuesday co-editor Boris and Johan Schaap organized a dinner for Marc van der Chijs, a Dutch entrepreneur who co-founded China’s largest video site Tudou and the Asia division of online gaming company Spill Group. In Holland and beyond, he’s well-known as a true pioneer who represents the almost endless possibilities in China.

Marc van der Chijs, Boris, Johan Schaap & Yuri van Geest

During dinner I had an interesting conversation with him about Tudou, entrepreneurship and enormous bandwidth usage. Van der Chijs came to China because of his job with Daimler-Chrysler brought him there. Yet after a while, Van der Chijs felt the urge to do something on his own and quit his job. “I went from a car with a chauffeur to a bicycle”, he told me. “I signed up for a six-month Chinese language program and started building my first company”. Eventually he co-founded Tudou, and this is where it gets really interesting.

Tudou is one big success story as it’s world’s largest video sharing website. According to Mary Meekers latest data in Morgan Stanley’s Internet Trends Report, Tudou (35 billion minutes in January) is 40 percent bigger than YouTube (25 billion minutes). An average visitor, Van der Chijs told me, stays on the site for 47 minutes: “For the young Chinese people, it is a substitute for television”. Competition is tough though, as other major video sites like Youku and 56.com also manage to attract millions of visitors every day.

As you might know, they’ve recently raised 57 million dollars. When I asked Van der Chijs what Tudou will do with this money, he replied: “Spend it on bandwidth”. No other site has a bandwidth bill which is as high as Tudou’s. He said that he could turn Tudou into a profitable business by limiting the bandwidth usage, yet then his competition would probably catch-up. So Tudou uses the recently raised money to invest in servers and its infrastructure. “We’re talking about thousands of machines here”, said Van der Chijs. Moreover, Tudou isn’t doing a bad job with selling advertisements – preloaders and banners – and preventing unnecessary money spending – “I fly economy”.

So take this from a man who knows what he’s talking about: to stay ahead of the competition, video sites like Tudou should invest in bandwidth. And one day, one day it will most definitely pay off.