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E-Commerce Accounts for 8% of Youku Q2 2011 Ad Revenue

Sohu IT, 8/09/11

During Chinese online video site Youku's (NYSE: YOKU) recent Q2 2011 earnings call, CEO Victor Koo said that e-commerce advertisers accounted for only 8% of Youku's total ad revenue in Q2 2011. Ku said that Youku's brand advertisers are predominantly from the fast-moving consumer goods (FMCG), automobile, IT, and telecom sectors.

CFO Liu Dele pointed out that 52% of overall traffic was from direct visitors to the Youku website, while 25% was from search engines and the remainder from third-party links such as navigation sites and social networking sites.

According to Liu, Youku spent RMB 144 mln on licensing content in Q2 2011, RMB 117 mln of which went towards content, the majority of which will be broadcast in 2012, although some will be released in 2013, and the rest is currently in the process of being broadcast online.

Youku's broadband costs rose 44% YoY, with approximately 35% attributable to traffic growth while the remainder is due to the increasing popularity of HD and ultra-HD content.

Unique visitors range from 35 mln to 37 mln on weekdays, according to Liu, while on weekends unique visitors reach between 40-42 mln, with active users averaging about 1 hour on the site.

Liu said that ad commissions were approximately 17-18% in Q2 2011, with rates expected to decrease in the long term as the ad business expands.

Koo added that average revenue per user (ARPU) from advertisers rose from RMB 493,000 in Q2 2010 to over RMB 900,000 in Q2 2011, up 81% YoY.

Keywords: online advertising video advertising broadcasting rights copyright Liu Dele Victor Koo ARPU content Internet broadband users online video Youku active users HD YOKU Q2 2011 fiscal report

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