Video sites Tudou and Youku battle for world’s biggest internet market

This week, Beijing-based research agency BDA announced that China is now the largest Internet market. With 220 million connected people they’ve outnumbered the US with 4 million users.

In this huge market, there’s an interesting battle between one YouTube rip-off against another going on. Tudou and Youku are both fighting for the attention of the 220 million online Chinese, and I must say, it’s one helluva fight. There’s of course lots of money involved, a government that cannot be trusted and even Mr. Murdoch comes along.

Reuters reported that Youku has partnered up with MySpace China. Officiously not for the money, considering that Youku completed three rounds of funding last year that make up for 40 million dollars. It’s more about targeting the local market. Youku CEO Victor Koo: “The partnership is aimed at driving Internet traffic to both Web sites and sharing online products”.

While Youku is celebrating this good news, Tudou is probably still a bit nervous. Last week our WebTipr from China, Doron Vermaat, interviewed Tudou co-founder Marc van der Chijs about rumors about a possible shutdown. The rumors seem to be nonsense, yet due to the loads of attention they got, the damage is already done. Van der Chijs: ““It’s hard to find out where this rumor is coming from but I am pretty sure the competition don’t have any problems with the fact that this kind of rumors about Tudou are created and spread.”

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After a long search on the web, it seems like Youku is the most popular service. According to Nielsen/NetRatings the service has more than 100 million daily video views (December 2007). In the summer of 2007, Tudou counted 360 million video clips per week.

They’ve one thing in common: both are growing with an unseen speed. Youku had a 20-fold increase and Tudou grew from 131 to 360 million video clips per week in just three months. Other top video sharing websites in China include: 56.com, mofile.com, 5show.com, pomoho.com, uume.com and 6rooms.com (source). You would almost think that Chinese internet users are only browsing video sites. Just think of the revenue as soon as the services find a way to monetize their content and you’ll realize that China will one day be the largest internet market in money terms as well.