Alibaba is buying Youku Tudou, known as China's YouTube as it continues to move into the Chinese digital media market. Bobbi Rebell reports.
Alibaba is buying China's YouTube, Youku Tudou for about $3.7 billion. It's a premium of about 35 percent for the 82 percent of the company it did not already own- and higher than the original 30 percent premium it offered in mid October. The deal gives the e-commerce giant access to more than half a billion online users, and further grows its push into the Chinese digital media market. Wedbush Securities Gil Lauria says Alibaba has a very ambitious long term vision: SOUNDBITE: GIL LAURIA, ANALYST, WEDBUSH SECURITIES (ENGLISH) SAYING: "They want Chinese consumer to not only buy on the phone, and on their computer through a traditional e-commerce channel, they want to actually have content out there that the consumer are buying and then possibly have merchandise within the content. Think of watching a TV show where you can buy the merchandise from- that the actors are wearing or that is displayed or that its highlighted." Lauria adds that the move comes right out of Amazon's playbook, and that Alibaba is in fact emulating the U.S. rival's strategy. Lauria likes the stock, saying it is a bet on the growth of the Chinese consumer. The stock fell on Friday after investor Jim Chanos called Alibaba a short idea. In other words betting the stock was going to fall. He cited accounting concerns.