Alibaba is buying the Chinese equivalent of YouTube for $3.7 billion (£2.45bn) as the e-commerce giant looks to strengthen its position in digital media.
The web giant already held an 18.3 percent share in Youku Tudou, which currently has around 580 million video users a month.
But now Youku’s board of directors has approved the merger, shares will be taken off the NYSE in early 2016 as Youku goes private.
“We believe this combination with Alibaba maximizes value for Youku Tudou shareholders and significantly benefits our customers, users and team,” said Victor Koo, CEO of Youku Tudou.
In March, Alibaba invested £254 million into Beijing Enlight Media, a TV show maker. A year previously, Alibaba bought a controlling stake in ChinaVision for £534 million, which is now known as Alibaba Pictures.
The move is Alibaba’s latest to stay neck and neck with its western counterparts. In July of this year, the firm announced a £640 million investment program for its its Aliyun cloud computing division, in an attempt to challenge US rival Amazon Web Services (AWS).
Aliyun president Simon Hu has made no secret of the firm’s attempt to become a serious competitor to Amazon Web Services.
“Our goal is to overtake Amazon in four years, whether that’s in customers, technology, or worldwide scale,” Hu said in an interview. “Amazon, Microsoft and others have already laid the groundwork for us by educating the markets about cloud in the U.S. and Europe, so we have an even better opportunity to join in the competition.”
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