Rumors has been spreading about Baidu‘s potential acquisition of Tudou, the online video service which has gone a long and tough trip towards its IPO.

Tudou was said to halt its IPO in the wake of Baidu’s proposal. Actually, Tudou filed for IPO last November even before Youku did so. Now with Youku get listed on Nasdaq, Tudou is still wandering outside the door of capital market. Once a while, we heard that the company was filing again. But nothing really happens.

According to people familiar with the matter, Baidu proposed two approaches to intrigue Tudou, the first one is Baidu acquires Tudou but the latter will continue its operation independently. Qiyi which also belongs to Baidu will focus on copyrighted quality content while Tudou will be more of a UGC platform, something Tudou is really good at.  The second proposal is to acquire Tudou via Qiyi in an aim to consolidate the two to compete against Youku.

The cash-flow can only sustains Tudou for like another two quarters, according to some industry observers.

Except for Baidu, Youku CEO Gu Yongqiang also said they didn’t rule out the opportunity of acquiring Tudou as well. We wrote about this few months ago when rumor saying Youku is planning an acquisition for an Youku-Tudou pair up.