BEIJING—Youku.com Inc.'s second-quarter revenue nearly tripled from a year earlier, although the Chinese online-video company continued to operate at a loss as costs in the business remain high and the market becomes increasingly competitive.
Youku allows users to upload and share video content—similar to Google Inc.'s Youtube—and also provides licensed video content such as movies and television shows. It is looking to expand its lead in China's online-video market as its top rival, Tudou Holdings Ltd., is preparing to raise funds in a U.S. initial public offering and other companies, including Sohu.com Inc., are investing heavily to expand their online-video offerings.
Tudou said last week that it expects to sell six million American depositary shares at an estimated range of $28-$30 each in its IPO. It expects to receive net proceeds of about $143.5 million if the shares price at $29.
Beijing-based Youku on Tuesday posted a second-quarter net loss of 28.1 million yuan ($4.4 million), or 26 yuan per American depositary share, compared with a net loss of 62.6 million yuan, or 3.08 yuan per ADS, a year earlier.
Revenue rose 178% to 197.9 million yuan. In May, the company predicted second-quarter revenue growth of 125% to 135% from a year earlier.
Youku Chief Executive Victor Koo said the company's mobile application made for Apple Inc.'s iPhone has been downloaded 4.8 million times and its application for the iPad has been downloaded 2.2 million times, making it the most popular among Chinese online-video applications.
Mr. Koo also said Youku has launched an online-video-search website and is expanding its video offerings through a deal with Time Warner Inc.'s Warner Bros. studio.
"The scale of our content will allow us to monetize more quickly than competitors," he said. The company expects revenue to more than double again in the third quarter, with projected growth of 110% to 120% from a year earlier.
Youku had a 21.5% share of the revenue in China's online-video market in the first quarter this year, compared with 16.2% for Tudou and 13.1% for Sohu, according to Beijing research firm Analysys International.
Youku raised $203 million in an IPO on the New York Stock Exchange in December and posted the strongest first-day performance for a stock in the U.S. in five years. The company's American depositary shares were down 11%, or $2.79, at $23 early Tuesday, compared with the IPO price of $12.80.
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