Opened at $24.41 each on the Nasdaq stock exchange, down 13.4% on their $29 asking price, not a perfect debut, but Tudou, the potatoes finally went public today, raising ~$146.6 million with an offering of 6 million American depositary. We had a call with Gary Wang, CEO of Tudou.
“It’s been 4 years since we first met, and it’s really been a long way. ” when I asked Gary about his personal feeling after being through so much in past a few months, he said to me, “I am very excited and also very looking forward to the new journey for Tudou. Thanks to our investors who are always confident for us and to the team for their hard work.”
Tudou definitely missed the best time for IPO, and its market valuation is roughly only 1/3 of its competitor Youku which is listed back in last December. With less money in the pocket to burn, Tudou obviously faces a touch competition ahead. Gary admitted that but he said no one is going to use all the money raised and they just need spend the money on wherever it’s needed. He said the money would be used mainly on the content, the bandwidth and the platform upgrade.
Started with the UGC model, Tudou also follows Hulu’s model and spends large amount of money on buying copyrighted video content, addition to that, it also produced 2 drama movies itself. Tudou and Youku both started like YouTube, but now all become a mix of YouTube+Hulu+HBO. “Chinese online video market is more complicated than the western.” Gary said, “UGC is always important for us as we’ve been doing our Video Festival for over 5 years and we will continue doing that to encourage our users to produce good video content. But in China, producing your own video content is also important given the fact that buying copyrighted content is so expensive.”
“Tudou is to be a platform where everyone can find any type of video content at anytime and anywhere. ” Gary positions Tudou as such.
“We will definitely spend more effort on the mobile market. We have China Mobile as our mobile video distribution platform partners which is definitely the key in our mobile strategy.”
The competition is going to be tough still. Gary believes Tudou can be more competitive because its video content is more entertainment-focus and the user base is younger at the age of 14-32. “We have only one competitor which is, Youku”, Gary said.
Ads will still be the main revenue source for Tudou, as Gary said. As for the subscription model, Gary think it may take years to happen still. But he said there might be chance in the mobile space. “Watching copyrighted video clips on mobile by paying monthly subscription fee sounds more realistic”, Gary think.
Personally, I am also excited by Tudou’s IPO as I always think it should be first listed video company. Congrats to Gary Wang, one of few Chinese CEOs who is truly a great entrepreneur with silicon valley style.