Worth a Look: The FT on Tudou’s Profitability

TudouWhatever you think about how the business press report on the online media industry, they tend to do a better job than the tech press when it comes to asking awkward questions about a company’s bottom line. This week the FT published an interesting piece about how Chinese video sharing site Tudou, who went public in the US last year, continues to lose money as its net loss in the fourth quarter was Rmb148.9m ($23.6m).

The FT’s Kathrin Hille wrote:

That is down from a net loss of Rmb263.7m a year earlier but when share-based compensation is excluded the adjusted net loss is almost ten times that of the same period in 2010. For the full year, the net loss climbed to Rmb511.2m from Rmb347.4m in 2010.

Hille says some of the drag on profitability might be attributed to Todou’s legal tussle with market leader Youku, while both companies are investing heavily to keep pace with the continual investment in network infrastructure, content and on a legal tussle between the two companies. She continues:

All these challenges make profitability elusive, even as revenues are soaring.

In the fourth quarter, online video in China generated Rmb1.69bn in advertising revenues, 135 per cent more than in the same period 2010, according to Analysys, a Beijing-based internet research firm. Tudou’s net revenues rose 70 per cent year-on-year in the quarter. So when is the time to make money, if not now?

You can read the full article here.

If you’re also interesting in what’s happening in display advertising, a similar question on profitability was asked last week at the IAB event in Miami. The CEOs of AppNexus, MediaMath, Pubmatic, Rubicon Project and MediaBank were all on stage, and Jordan, Edmiston Group’s Tolman Geff’s asked how many of them were actually making money – most weren’t. Read the full story on Adexchanger.

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