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Business

Alibaba eyes China's equivalent of YouTube

Chinese e-commerce giant Alibaba has made a multibillion-dollar offer to buy any outstanding shares of online video company Youku Tudou. It's yet another endeavor to develop beyond its traditional platforms.

Alibaba on Friday offered $26.60 (23.42 euros) in cash for each American depository share of China's YouTube called Youku Tudou. Alibaba already owns 18.3 percent of the New York-listed target company.

The offer represented a 30.2-percent premium over the stock's closing price on Thursday, with analysts valuing the deal for the outstanding shares at over $4 billion.

Looking for growth opportunities

While Alibaba is uncontested king of e-commerce in China, it's been making a string of acquisitions lately to move beyond its conventional transaction platforms towards a much broader Internet firm.

"Alibaba needs more media resources to induce more traffic in the next quarter, and it also needs a strong leader to integrate the media assets under its name," said Ray Zhao, an economist at Guotai Junan Securities.

Media reports said Youku Tudou's Chairman and CEO Victor Koo and other major shareholders were supporting the deal, making the transaction likely to go ahead.

Alibaba's stock price has shed about 40 percent from its peak in November of last year, reflecting China's general economic slowdown.

hg/sri (Reuters, AFP)