Bloomberg yesterday reported that shares of Tudou (NASDAQ: TUDO), China’s second most popular online video site, jumped after announcing they have improved its integration with Weibo, China’s dominant micro-blog network with 250 million users.
TUDO closed at US$16.66 (2.49%) higher than the previous day but well below their 52-week range of $27.91. This is a positive trend for Tudou, as they have faced a number of struggles since their public listing on the NASDAQ. Firstly they found it difficult to find banks to underwrite the deal and more recently they have been in dispute with their biggest rival, Youku over copyright infringements.
Tudou has “enhanced” the platform for Weibo users to more easily share videos. Moreover, Weibo users will automatically become registered with Tudou users. Such a deal will certainly boost traffic for Tudou and is a lethal weapon against Youku. Users in China are generally disloyal to internet brands, they care more about, ease, price and the content, so switching is inevitable.