Video sites are slow to see profits

Absrtact: March 11, the potato and Youku signed the 100% swap agreement, sentencing the potato will be the fate of the city, and this distance from the potato August 17, 2011 Landing on Nasdaq is less than 7 months. From March 12 to 13th, Tudou's shares rose 176.15% per cent to 42.50 dollars.

March 11, the potato and Youku signed the 100% swap agreement, sentenced to the fate of the potato will be out of the city, and this distance from the potato August 17, 2011 Landing on Nasdaq is less than 7 months. From March 12 to 13th, Tudou shares rose 176.15% per cent to 42.50 USD/share.

In the face of "bleeding listing", less than 7 months after the listing of the potato, the original Yahoo China CEO Xie (Micro-bo) in the interview with this reporter Tan Chen: "The potato and Youku's merger is the potato investors push." "The loss of potatoes has failed to provide an ideal opportunity for its investors."

And at this moment, there may be a lot of VCs are gorgeous potato investors can be set free and easy, because not all investment video site PE, VC funds will be able to obtain such opportunities.

Statistics from Chinaventure Show: 2002-2011, including SoftBank Group, IDG, Sequoia China, Mitsui Investment, including a number of investment institutions, 76 times to include Youku, potatoes, music network, poly Media, including 38 video sites to invest 1.018 billion U.S. dollars. Among them, to Tudou, Youku, 酷6网 and Le video Network (300104.SZ) The four have listed video site funds amounted to 451 million U.S. dollars, and another 567 million U.S. dollars (about 3.6 billion yuan) funds are still betting on the "in the Wild" video site.

Because a lot of investment data is opaque, 3.6 billion yuan is only partial statistics, the overall data is far more than that.

But in the face of the slow to see profitable video site, billions of yuan of PE, VC funds in most of the capital may only be deep hold-up.

Investors eager to cash in

On the evening of March 13, a microblog of the founder and CEO of Huaxing Capital, Baofan, once again confirms the industry's speculation that potato investors are pushing for a marriage.

Baofan on Weibo, said that Youku potato merger "behind the scenes hero" is "to become a fund" founding partner, Youku's first investor Li Shime, and Jamie Source Capital Management partner, Tudou Director Jixun.

The era of capital is one of the investors before the listing of potatoes, which in 2006, 2010, two degrees to the potato investment, and mastered the potato listed before the 12.1% equity.

Before Tudou went public, it included IDG (IDG Marvell Venture), GGV Capital (GGV), Crescent Asia (Crescent Point), General Catalyst, Temasek Holdings (Temasek Holdings Pte) and other investment funds to invest more than 135 million U.S. dollars, mastered the potato before the listing of more than 83% of the equity.

As of February 16 this year, after 6 months after the listing of potatoes, the investment institutions held the potato stake is ushered in the lifting of the ban. After less than one months, the combination of potatoes and Youku was heard. In the context of the current rise in both potatoes and youku, the investment side of the potato is undoubtedly the biggest profit-makers.

Limited market space

And the active run of potato investors in sharp contrast, there is still a large number of wind investment in the video site investment in the mire and extricate themselves.

Wind investment favored the video site, which began in 2006 when Google shot to buy YouTube. This investment lets the VC and the entrepreneur all see the video website The value cake, to the video website investment also thus surging.

Chinaventure statistics show that 2004-2011, PE, VC annual investment in the domestic video site is about 3.5 million U.S. dollars, 56.8558 million U.S. dollars, 29.2 million U.S. dollars, 141 million U.S. dollars, 158 million U.S. dollars, 84.7826 million U.S. dollars, 207 million dollars, 338 million dollars. After summing up the above data, in addition to potatoes and Youku investment funds, there are still at least 587 million U.S. dollars (about 3.6 billion yuan) venture capital scattered in the unlisted video site.

For VC, PE investors, investment company's smooth listing, and then realize the investment value of the high return, is undoubtedly its most expected results. But most video-site investors are probably frustrated.

A private equity person to our correspondent, video website industry concentration degree is relatively high, there is no regional monopoly, with the current industry capacity and concentration of industry observation, the entire industry can also accommodate one to two listed companies. Now that the new company of Youku and Tudou has the potential to occupy more than 50% per cent of the market, the sixth-and seventh-ranked companies are unlikely to meet the standards of listed companies.

"Review of the previous two VC, PE on the video site of the favor, and now have to admit that the video site experienced a stage of investment overheating." "The private equity person said.

The hold-up after the carnival

Apart from the video site army listed hopeless, the future of video site is uncertain, but also let VC, PE feel cold.

Xie told our correspondent, video web site business model has been implemented for 6 years, but the entire industry is still in the red, and the industry does not see the video site This business model can be profitable point of time. The division of the industry boss, the second and the combination of cool and potatoes, and can not break the radio and television monopoly restrictions on the development of video web sites, can not solve the fundamental problems encountered in both operations.

In addition, a brokerage researcher pointed out: "Only rely on advertising revenue, video sites can never be profitable." Sadly, the current domestic video site relies on the advertising revenue of this single operating model. ”

Not only that, 2012 has entered the eve of Internet television, if Apple were to launch ITV this year, Google and other TV makers would be able to keep up with the resources on the Internet, which could be unified by television, and use intelligent, personalized, and categorized ways to view global content. No longer need the video site to act as a "setter" role, so the impact on the industry can be imagined.

"At that time, no longer is the video site of the individual whether hard to operate the problem, but the environment changed." It would be harder for investors to get out of the video site before. "Xie said.