Youku Tudou, 'China's YouTube', posts solid Q2 revenue on strong advertising, consumer business

Youku Tudou, mainland China’s leading online video services provider, saw efforts to diversify its business pay off after posting second-quarter revenue at the high end of the company’s estimates.

New York-listed Youku on Thursday reported a 58 per cent increase in net revenue to 1.5 billion yuan (US$244.3 million), up from 958.7 million yuan in the same period last year.

“That came in at the high end of the company’s guidance range of US$237 million to US$245 million, beating Bloomberg [analysts’] estimates of US$241.7 million by 1.1 per cent and our US$243.4 million forecast,” Alicia Yap, the head of China internet research at Barclays, said in a report.

Youku, which is headquartered in Beijing, attributed its strong revenue growth in the quarter ended June 30 to higher advertising sales and a sharp rise in its consumer business, comprising subscription-based service, mobile games and interactive live entertainment.

“With nearly half of advertising revenue coming from mobile, we have achieved broad adoption of mobile advertising by domestic and international advertisers alike,” Youku chairman and chief executive Victor Koo Wing-cheung said on Thursday.

“We expect these positive trends, reinforced by our clear growth strategy and improving business economics, to continue during the second half of this year.”

That solid turnover, however, was partly offset by wider losses last quarter.