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Google Invests $5 Million in Chinese Video Site Xunlei

Update 2: Jan 5: NYT confirms the amount Google invested is $5 million. The company previously had $20 million in venture backing from Morningside Ventures and IDG VC Partners.
Update 1: Jan 4, 207: Google has confirmed it as well, and China Daily reported Thursday that Google is joining up with Shanghai-based VC firm Ceyuan Ventures to buy a stake in Xunlei. The deal will formally be announced tomorrow at a local press conference.
Original Post: Dec 29, 2006: After some rumors about Google interested in buying a Chinese video sharing site, comes the news that it will invest in Shenzhen Xunlei Network Technology, which operated a local video sharing site Xunlei. Not much else was disclosed, though the company confirmed will be announced officially next month.
Existing investors in Xunlei include IDG Venture Capital and Morningside Asia Advisory, and the site also has partnership agreements with Motorola, Sina and Shanda.

3 Responses to “Google Invests $5 Million in Chinese Video Site Xunlei”

  1. shravan

    Hi Bizy & Ali,

    So by saaying this do you guys mean US companies have rights to charge google for using thier content in China. As google is not doing that by itself but promoting the other sites like Xunlei by acquiring them, does the rule apply to Google? Can they really charge Google for this? Does google's subsidary has to abide to the parent company rules of piracy if it has a subsidary is in other nation?

  2. Rafat Ali

    You have a good point..I bet U.S. companies are now scouring Xunlei's site to search for their pirated/illegal content and adding up the dollars.
    On Bitorrent clients, I am sure Google will be watching the likes of Azureus and the commercial BitTorrent for any consumer traction.

  3. Google has no problems with piracy. Xunlei is a bigger enabler of piracy than even youtube. The US content rights holders should now add China to the areas from which they want a Google payment to allow Google to keep running their content on Youtube and now Xunlei.

    I am guessing that Google made this deal for the following reasons:
    A. Makes Google's default search service within the xunlei application
    B.Gives Google a scaled platform on which to start testing video Google ads in China
    C. Starting to ramp up marketing spend to begin to battle Baidu. I think Google has been holding back on some marketing dollars until they felt their product and infrastructure was really in place in China. Now it is, so watch out Baidu. Google could spend on more on marketing in China than Baidu's total revenue in a year (225-250M USD in 2007) with basically no impact to Google's global bottom line.

    One bit of complete speculation I heard from a friend in China's Internet business. Why couldn't they take the Xunlei technology and roll it out in the US, to compete with all the Bittorrent clients out there?