Chinese Internet video website Tudou.com has announced that it has created a joint venture with another Internet video website, Letv.com, in Shanghai.

The newly established JV will be engaged in the purchase of licensed films and TV series.

Under the agreement signed by the two parties, Letv.com will reportedly hold a 51% stake in the JV and Tudou.com will hold the remaining 49%. Meanwhile, Letv.com and Tudou.com will invest CNY510,000 and CNY490,000, respectively, in cash.

The two parties will reportedly evaluate the purchased video contents in accordance to their quality and the preference of audiences. The JV will purchase the exclusive licenses for most of the video content and resell the license to other websites.

The board of directors of the new company will be formed by two directors from Letv.com and two from Tudou.com. The chairman will be assigned by Tudou.com and deputy chairman assigned by Letv.com. The term of office of directors is three years and they can seek re-election. The operation and management organization of the JV is responsible for the daily operation and the organization will have one general manager who will be recommended by Letv.com. The term of office of the general manager is also three years.

Wang Xiangyun, chief operating officer of Tudou.com, said that with this strategic joint operation, the company will gain a powerful partner. The joint investment is expected to increase the two parties’ licensed video resources in a cost-effective way.

Liu Hong, chief operating officer of Letv.com, said the new JV will play advantages of Tudou.com and Letv.com to enrich the video contents supply of both websites.