Tudou.com on track for first profit as users rise

Tudou.com on track for first profit as users rise

TUDOU.COM, often regarded as China’s YouTube, will reach its first profit next year thanks to increasing advertising income, the online video Website said yesterday.

The Shanghai-based firm confirmed it has completed a fourth round of financing recently, but it declined to reveal details. The latest investment in Tudou was reported to be between US$57 million and US$70 million.

Tudou will become profitable as early as 2009 but the figures of predicted revenue or profit are not available now, according to Tudou, which means potato in Chinese.

Tudou now has 60 million users every month, or one-third of China’s total Internet population.

“The first users were students and the viewers now include white-collar people, especially young women,” said Tracy Deng, Tudou’s vice president of marketing.

They have greater money to spend and that helps to make Tudou’s platform more attractive to advertisers, Deng said. Tudou has attracted advertisers like Microsoft, Intel, Adidas and Pepsi. It features popular products on its front page, which allows users to watch a more complete advertising video.

China’s online video market revenue will reach 3.4 billion yuan (US$485 million) in 2010 compared with 900 million yuan in 2007, according to iResearch Inc.

Industry insiders, however, said it is still unclear if online video can make money in China.

Broadcasting rights and media are highly regulated and some of China’s state-run media may launch their own Internet video services, which will affect privately-owned firms such as Tudou and Youku.com.

Tudou said it has applied for a license to operate an online video business.

The Website started operating in April 2005 with an initial combined investment of US$30 million.