Big Tudou for ad platform launch

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SHANGHAI -- Chinese video-sharing site Tudou.com has launched an online advertising platform executives hope will make the homegrown YouTube competitor profitable.

The platform launched this week will run short ads alongside the user-uploaded videos, said Tudou senior director of advertising, Charles Fan.

"Our initial concern was to grow out our customer base," Fan said in an interview, adding that the platform, now in beta mode, will go site-wide in two weeks. "Now we are turning out efforts toward profitability."

Founded in 2005 by Marc van der Chijs and Gary Wang with $30 million in venture capital, Tudou now claims 300 million users, or about one-third of China's broadband users.

Another Chinese peer-to-peer video site that runs ads alongside uploaded content is Ku6.com. Sales manager Lili Li said the site, the first Chinese video site to allow users to upload original videos, already has earned the company almost $800,000 in revenue from big advertisers, including McDonalds.

Tudou, meanwhile, has not yet revealed how it plans to share ad revenue earned online with companies whose intellectual property often is posted without permission.

In the wake of a lawsuit filed earlier this year by Viacom against YouTube, Hans Yu, Nielsen/NetRatings managing director for China, cautioned Chinese players:

"Big advertisers simply do not want their ads attached to pirated video," said Yu, adding, however, that the model Tudou and Ku6 are pursuing is drawing attention as the country's broadband penetration and disposable income both rise.

Meanwhile, Yu said that YouTube is not likely to gain traction on the mainland because, like its parent company, Google, it has not fully submitted itself to regulation by authorities in Beijing. YouTube runs the risk of being blocked or banned as it was in Thailand in April after users posted videos mocking the Thai king, Yu said.
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