Sohu IT, 2/26/14
According to an industry insider, Chinese online video site operator Youku Tudou (NYSE: YOKU) has formed an online video partnership with internet firm Qihoo 360 (NYSE: QIHU). Although the exact details of the agreement are unknown, the source cites an anti-piracy suit filed against a number of online video search services by Youku and a host of other video operators, which did not include any allegations against Qihoo 360, as evidence of the alliance between the two companies.
In November 2013, the China Internet Video Anti-Piracy Alliance, an industry association formed by Tencent's (0700.HK) Tencent Video, Youku Tudou, and Sohu (Nasdaq: SOHU) Video, launched a suit against internet company Baidu (Nasdaq: BIDU) and Shenzhen-based media player developer and operator QVOD for broadcast of pirated content for which Tencent, Youku, and Sohu hold the online distribution rights. Originally planned for inclusion in the suit was Qihoo, but the alliance reportedly dropped any allegations against the company at the insistence of Youku.
Online video traffic directed from Qihoo properties reportedly makes up a large share of traffic on Youku's PC site.
Baidu has since repositioned its online video strategy to place more focus on its iQiyi online video site, reducing investment in its Baidu Video group.
Editor's Note: Qihoo reportedly also accounts for a significant portion of total traffic to Sohu Video - a point that caused considerable concern for Sohu's Sogou when the latter elected to decline M&A overtures from Qihoo in favor of those from Tencent. According to industry sources, to push the deal through, Tencent ultimately agreed to compensate Sohu Video for any subsequent decline in traffic from Qihoo. For more information on this topic, please see Baidu, QVOD Sued for Piracy, MD 11/13/13 issue, and Update: Tencent Takes 36.5% Stake in Sogou, MD 9/16/13 issue.