Gu Yongqiang: Youku Tudou Will List On The Chinese Stock Market Within Three Years

(Chinese Version)

“It was like going to college in New York. We ve spent four or five years studying, and now we are ready to graduate,” Gu Yongqiang, chairman and CEO of Youku Tudou, commented on the privatization of Youku Tudou.

On April 6th, Youku Tudou officially announced that it had completed the merger with Alibaba according to the merger plan carried out on November 6th, 2015, and that Youku Tudou had already become a wholly owned subsidiary under Alibaba. According to the agreement, the price of the deal was set at USD 27.60 per American Depositary Share ("ADS", each representing 18 ordinary shares of Youku Tudou).

Why did Youku Tudou eye on the domestic stock market?

Youku was quite successful at one time by listing on the American stock market and comparing itself to “China s YouTube”. Mr. Gu would also admit that the listing was quite a cornerstone for Youku.

However, years passed and Youku had got to change with the rise of many other video websites and give up YouTube model, which disappointed many American investors and brought down its market value a great deal. Back in China, however, LeTV and Baofeng Technology were thriving in the Chinese stock market and enjoying a much higher market value than You Tudou. Mr. Gu couldn t not be attracted by the huge opportunities back in China.

“Our goal is to list on the Chinese stock market within three years,” Mr. Gu revealed to media that Youku Tudou had planned to list back in the Chinese stock market for quite some time.

For Mr. Gu, to adapt to the multi-screen and mobile Internet age, Youku Tudou should be more like a culture and entertainment company. Youku Tudou went back to China due to strategic concerns, not just a rush of blood in the head.

In addition, with the support from Alibaba, Youku Tudou finally had the gut to compete with iQiyi and Tencent Video over resources. However, to list on the Chinese stock market within three years, Youku Tudou had to hand in a good revenue book. After all, Baofeng Technology pinched and scraped for three years so as to list on the stock market. Next, we are looking forward to what Youku Tudou would do along with Alibaba.

How will Alibaba and Youku Tudou merge with each other?

Alibaba has entered the Chinese culture and entertainment industry for quite some time: from Alibaba Film to Alibaba Music and Alibaba Sport, yet Alibaba still needs a platform just like Youku Tudou. More importantly, Alibaba is not short of money.

Mr. Gu suugested that the merger with Alibaba not only had to do with Alibaba s money, but also had strategic implications. Following, Youku Tudou would connect with Alibaba in areas such as user charging service, e-commerce, data, content and channel. To be more specific, Youku Tudou would allow payment via Alipay, and Alibaba would bring great changes to Youku Tudou in e-commerce sector by attracting Youku Tudou users to purchase while watching videos, something many we media podcasts such as Luogic Show has already been doing.

To cooperate in terms of content, Alibaba Digital Entertainment has already been cooperating with Youku Tudou, and will hold a series of press conference to announce other rounds of cooperation between Youku Tudou and Alibaba Sport, Film and Music. Mr. Gu predicted that the next few months (or even longer) would witness lots of bold moves of Youku Tudou.

For Mr. Gu, Youku Tudou would make huge breakthrough in terms of channel, content and profit model in the next decade.

What role will Mr. Gu play in the future Youku Tudou?

Many people must be interested in this question. To respond, Mr. Gu suggested that Alibaba, Chengwei Ventures and himself will be the main members of the new board. If Youku Tudou chose to list on the stock market, a few more independent members would be added to the board, yet there wouldn t be so much change.

When some reports asked if Mr. Gu would end up becoming a professional manager, Mr. Gu didn t think so and said that: “I don t think I will become a professional manager, since I am still chairman of the board.” Mr. Gu revealed that there was a deal between Alibaba and himself that Mr. Gu and Chegnwei Ventures would always be the shareholders of the company.

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[The article is published and edited with authorization from the author @Li Xiaonian, please note source and hyperlink when reproduce.]

Translated by Levin Feng (Senior Translator at PAGE TO PAGE), working for TMTpost.