Youku Tudou expects new growth prospects from Alibaba collaboration

Youku Tudou, the mainland's leading online video services provider, sees its co-operation with e-commerce powerhouse Alibaba Group Holding fostering more advanced targeted brand advertising capabilities for both companies.

"The partnership with Alibaba is very healthy and positive," Youku chief executive Victor Koo Wing-cheung said yesterday in a conference call with analysts.

New York-traded Youku needs all the positive reinforcement it can get after reporting a wider loss in the three months to June.

The company posted a net loss of 164.43 million yuan (HK$207.14 million) for the second quarter, compared with a loss of 105.05 million yuan a year earlier, mainly due to higher-than-expected product development, sales and marketing expenses.

Revenue grew 27 per cent to 958.72 million yuan from 753.46 million yuan on the back of higher advertising sales, fees from partner-mobile network operators and about 400,000 paying subscribers.

Alicia Yap, the head of China internet research at Barclays, said in a report Youku's revenue came in below the Bloomberg consensus estimate of about 978 million yuan.