Baidu Begins New Internet Video Enterprise In China

Chinese search engine firm Baidu Inc. is launching a new company to provide advertising-supported online video services in China.

The company, which operates the Baidu.com website, will establish a new independent company to provide licensed online video to Chinese Internet users. The new company will work closely with content providers to provide copyrighted premium video content including movies, TV series, sporting events, animation and other varied content to Internet users through an advertising supported model. Yu Gong, formerly president and chief operating officer of China Mobile’s 12580 business, has been appointed chief executive officer of the new company.

Baidu has not yet revealed the name of the new company or how the company would be capitalized and registered.

“As China’s Internet industry evolves, we have seen increasing demand for high-quality video content on our search platform. By establishing this new company, we will be able to better serve our users and customers with superior content and focused resources,” said Xuyang Ren, Baidu’s vice president of marketing and business development. “I am very excited to work with Mr. Gong, who has strong experience in the internet industry in China, to grow our new company into a leader in the field through product innovation and a robust network of partnerships with leading content providers in China and globally.”

Providing legitimate video services in China has become a priority in recent months. A month ago, 530 Internet video service providers in China, including well-known BitTorrent-based download service providers like Btchina.net, were shut down for “irregular operations”. According to Cao Yunxia, a representative from the Internet audio-visual program management department of the State Administration of Radio Film and Television, illegal audio-visual service websites have brought great harm to the media industry in China and the administration will continue to seek and destroy illegal Internet audio-visual program providers.

But Baidu still has competition with both government-funded and private-funded online video ventures. last week, China Network Television, the national network television broadcasting organization of China with ties to CCTV, was formally launched under the domain name of CNTV.cn. And two weeks ago, Chinese video website Youku.com completed its latest round of financing and gained USD40 million from private equity firms. These private equity firms include Chengwei Ventures, Brookside Capital, Maverick Capital, and Sutter Hill Ventures.