Bloomberg News

Youku Falls to 6-Month Low as China Targets Web Pornography

July 10, 2012

Youku Inc. (YOKU:US), owner of China’s most popular online video site, tumbled to a six-month low as a new government campaign targeting online video content considered pornographic heightened concern of further Internet curbs.

Beijing-based Youku sank 5.1 percent to $19.07 at the close of trading in New York, its lowest price since Jan. 17. Shanghai-based Tudou Holdings Ltd. (TUDO:US), an online video operator which Youku plans to acquire (YOKU:US), lost 4.6 percent to $29.33.

China’s National Office Against Pornographic and Illegal Publications is planning an anti-pornography campaign, scheduled from mid-July to the end of November, focused on videos, books, magazines and online content, Xinhua News Agency said yesterday. Website operators will be responsible for reviewing online content before it’s posted on the Internet, said Andy Yeung, a New York-based analyst for Oppenheimer & Co.

“Operators will have to screen user-generated content for violence and sexually inappropriate video,” Yeung said in a phone interview in New York. “Investors are nervous about the impact on costs, on the user experience and whether there will be other regulations in the future.”

Youku said on March 12 that it plans to acquire smaller rival Tudou in a stock deal valued (YOKU:US) at $737 million.

Phone and e-mail messages to Youku media relations director Jean Shao in Beijing were not immediately returned after business hours.

To contact the reporter on this story: Leon Lazaroff in New York

To contact the editor responsible for this story: Tal Barak Harif at

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