Youku says the partnership will bring in traffic to both sites, making them more valuable for global advertisers looking to reach online users cost effectively.

Victor Koo, CEO of Youku.com
(Photo Credit: CCBN)

"Youku has a history of partnering with strong brands and pioneers on the Internet. We believe the marriage of a video and social networking website will significantly enhance the user experience for China’s online consumers, contribute to bringing more colorful experiences to the space, and multiply the ways in which Internet users can interact with each other," said Victor Koo, CEO of Youku.com.

Youku launched in December 2006 and is the fastest growing Web site in China with more than 100 million daily video views according to Nielsen/NetRatings.

MySpace China is a locally owned, operated and managed company co-founded by MySpace, IDG and China Broadband Capital Partners.

China has 210 million Internet users and has surpassed the United States as the world’s largest online market by the number of users, according to Beijing- based research firm BDA.
 

Matt Marshall looked specifically at a Chinese site named Youku.  There’s a certain similarity in identification between it and YouTube, eh?  And to its credit, Youku was correct in stating that it had reached a certain number of views – the number of views YouTube received as it was being bought by Google.

But Marshall writes, "Youku has far fewer unique visitors than YouTube did back in 2006, according to Comscore’s global data.  And while no slouch, Youku doesn’t appear to be growing in the same upward right manner YouTube did, almost without exception – and continues to grow today."

There doesn’t appear to be any Grand Lesson to learn here, other than the already-known one of not believing everything you read in press releases.  Still, if the American economy tanks, we might do a bit better having some knowledge of foreign companies.

Also, if anyone’s keeping score, Baidu still very much qualifies as the Google of China.

YouTube, Youku . . . as you can see, both companies’ names even start with the same three letters.  My inability to read Chinese makes further comparisons somewhat impossible, however, so we’ll have to move on to the business aspects of the deal.

Lynn Qu reports, “The investment was led by US venture capital firm Bain Capital subsidiary Brookside Capital Partners and the three existing Youku.com investors Sutter Hill Ventures, Farallon Capital Management and Chengwei Ventures.”  Those names might not be too famous – the most noteworthy thing about them is Sutter Hill’s tie to NVIDIA – but they’ve obviously got money.

Youku will use (some of) that money to do all the normal solidify-and-expand stuff one might expect.  This shouldn’t be a from-the-ground-up operation, though; the service is already rather popular, with Qu stating that “videos are broadcast more than 70 million times a day.”

So, for better or for worse (we’re not used to feeling sorry for Google) online video may be yet another market in China in which the American giant’s looking at some extremely tough competition.