Watch Out Youku: Google-backed Xunlei Marching to Market

Shares of recently listed video-sharing site Youku (NYSE: YOKU) got a nice bump earlier this week on better-than-expected earnings as it moves closer to profitability; but some of the wind could soon come out of its sales on reports that rival Xunlei is also planning its own overseas IPO (English article). What’s interesting here is less the fact that Xunlei may be revving up for a second-to-market IPO, and more the fact that the company counts Google (Nasdaq: GOOG) among its backers. Many of you may recall that search giant Baidu (Nasdaq: BIDU) was in a similar situation a few years back, revving up for its Nasdaq IPO when Google zoomed in at the last second and made an offer for the company which Baidu ultimately refused. Google is no slacker when it comes to web technology, and, especially given its recent retreat from the China search market, I wouldn’t be at all surprised to see if make a bid for a bigger stake or even outright purchase of Xunlei in the run-up to an IPO. Who knows: Maybe history willl turn out differently this time, as Google could certainly use a China video-sharing site to complement Youtube.