Chinese smartphone maker Xiaomi to invest in video streaming firm Youku Tudou

Chinese smartphone maker Xiaomi Technology Co Ltd is acquiring a stake in a local video streaming company Youku Tudou.

Youku Tudou, which made the announcement through a press release, did not say how large the stake would be or the size of the investment, but said that the transaction would take place on the open market.

Xiaomi had last week said that it would invest a total of $1 billion to expand its Internet TV content (See: Xiomi to invest $1 bn in TV content).

Both companies plan to accelerate the development of the multi-screen media and entertainment ecosystem and will jointly develop content and technology, including developing multi-screen online video services.

Xiaomi will also license content from Youku Tudou, and the two companies will jointly invest in the production and distribution of online video content and movies.

Youku Tudou, in which e-commerce giant Alibaba Group holds 23.4-per cent stake, is China's leading Internet television company, and its apps enable users to search, view and share high-quality video content across multiple devices.

It has over 500 million active user base and its daily video views have passed 800 million.

Youku App has most recently become the second most-popular Chinese mobile app in terms of user time spent, according to iResearch.

Xiaomi is China's leading Internet company and the world's third-largest smartphone maker after Samsung and Apple.

Xiaomi also has a TV unit called Xiaomi TV and a set-top box unit, both of which use the MIUI software and content. (MIUI, developed by Xiaomi, is a stock and aftermarket firmware for smartphones and tablet computers based on the open-source Android operating system)

"Both Youku Tudou and Xiaomi have been pioneering multi-screen ecosystem development in the mobile internet era.  With the new partnership, we'll leverage our respective capabilities to strengthen our ecosystems and to enhance user experience,'' said Victor Koo, chairman and CEO of Youku Tudou.

Xiaomi's founder and chairman and CEO Lei Jun, said, "Youku Tudou has been a leading force in original content production among Internet companies, and Youku Tudou's user base and Xiaomi's fan community are closely associated. The partnership will bring the development of the Internet industry in China to the next level."