Nada and Foo also worked closely with Tudou during its merger talks with Youku, Foo says.
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Rumors swirled that the company was burning cash at a much higher rate than Youku.
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Youku was already the top site before its August merger with Tudou, the number two site.
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Youku went public in December, jumping 161% in its first day of trading.
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Illustrating the stakes, Youku and Tudou are battling each other over rights to some content.
The combined company will have the two leading online video brands in China: Youku and Tudou.
Tudou shares have nearly tripled on the news, and Youku shares are also trading sharply higher.
Youku and Tudou and its ilk grew into something similar to a Hulu or cable TV.
FORBES: Youku's Now The King Of China Web Video: Can It Make Money?
The site actually filed to IPO on Nasdaq last November before Youku (YOKU) became a hit with investors.
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Each Tudou ADR will will be exchanged for 1.595 Youku ADRs, which represent 18 Youku Class A shares.
They will be too busy telling you why Youku is under-valued relative to some even newer tech IPO.
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Tudou faces competition not only from Youku but also other China Internet companies like Baidu, Tencent, Sina and Shanda.
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Programming accounts for much of their costs: Youku spent 26% of its revenue on content, while Tudou spent 28%.
The video will soon be posted on Chinese YouTube clones Tudou and Youku.
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The rest is made professionally, for instance by television stations or Youku itself.
Youku shares are up over 13 percent year to date ending Sept. 11.
Koo was COO, CFO and president of Chinese portal Sohu.com before founding Youku, a site that streams video programs.
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He also scored with Chinese online video company Tudou, which went public in 2011 and later merged with rival Youku.
Since most Chinese are just discovering digital video, says Mr Koo, users generate only about a quarter of Youku's content.
The stocks of newly listed Chinese companies Renren, Youku, Dangdang and NetQin Mobile are dipping.
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It would be a shot across the bows of Youku, which is busy trying to integrate Tudou (both maintain separate platforms).
Youku and its competitors recently extended preroll advertising on videos to 40 to 60 seconds, up from 15 to 30 seconds.
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Youku founder and Chief Executive Victor Koo owns 34.8% of the company, according to a prospectus filed with the SEC.
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The media industry, with its lumbering state giants and fragmented private sector, has created another opening: for online-video sites, such as Youku.
Chinese video sharing site Tudou beat Youku to a product debut by one year, and was the market leader for several years.
Koo already had seven years of Chinese Web experience (Sohu) when he started Youku in 2006, inspired from afar by then year-old YouTube.
FORBES: Youku's Now The King Of China Web Video: Can It Make Money?
But China's own websites are fast enough that TV shows streamed online by video sites, like those run by Youku Tudou Inc.
Last year, 61 venture-backed companies went public in the U.S. China claimed 22 of the total, with such fliers as Youku, HiSoft.
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But Youku is still losing lots of money and if it does become a highly profitable company, it will take years to get there.
Terms call for each Tudou Class A and Class B shares to be exchanged for the right to receive 7.177 Class A shares of Youku.
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