Alibaba Group Holding Ltd's bid to buy Youku Tudou , a Chinese video site similar to YouTube with 500 million monthly unique visitors, establishes Alibaba as a "formidable player" in online video, said Cantor Fitzgerald analyst Youssef Squali. The analyst, who reiterated a buy rating and $88 price target on the stock on Monday, said the move would enable Alibaba to set up a streaming service that is a hybrid between Google Inc.'s ad-based YouTube , Netflix's subscription-based streaming service and Amazon's Prime Instant Video, potentially with original programming. If approved, it would be Alibaba's fourth acquisition in two years to expand its video entertainment offerings. Last year, it bought a majority share of ChinaVision Media, enabling it to set up a professional filming company now known as Alibaba Pictures. "This is yet another big step by Alibaba towards becoming an ecosystem rather than just an e-commerce platform," said Edison Investment Research analyst Richard Windsor. Shares of Alibaba have fallen 14% over the last three months, underperforming the 4.5% decline of the S&P 500.
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