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Barclays' Alicia Yap make a bull case for Chinese Internet stocks, which have been...

Barclays' Alicia Yap make a bull case for Chinese Internet stocks, which have been hammered  by macro and regulatory fears. Yap expects Chinese online ad revenues to surge as the gap between the web's share of leisure time and ad spending in China is narrowed. Outperform ratings are given to BIDU, YOKU, SINA, SOHU, CYOU, and NTES.
Comments (1)
  • It is interesting that investors are still overlooking the fact that Youku is only able to advertise premium content. Given what has happened to Netflix, any business model that is based on monetization of premium content (whether the monetization is through advertising or subscription fee), will ultimately run into content costs. Youku's cost structure is that of Netflix and monetization model is based on Youtube's. This hybrid business model brings together the deficiencies from both businesses.

     

    Macquarie recently published how the content costs have been escalating for Youku. With more companies loaded with cash now, after TUDO's IPO particularly, the content cost will only escalate from here on. Barclay's note ignores the very fundamentals of this bsuiness model.
    11 Oct 2011, 03:41 PM Reply Like
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