SHANGHAI, Jan 5 (Reuters) - China's top search engine Baidu Inc BIDU.O is teaming up with Providence Equity Partners, an investor in U.S. video-viewing site Hulu, to set up an online video channel in China, a source familiar with the situation said on Tuesday.
The channel, which will show licensed content, is set to launch in the first quarter, marking Baidu’s latest foray into China’s fragmented but potentially highly lucrative online video market.
Earlier on Tuesday, local websites reported the joint venture company has received about $60 million in private equity funds and Baidu will invest about $10 million into the firm.
U.S.-based Providence Equity Partners and Baidu will team up to create a fund to buy licensed content to show on the channel, said the source who declined to be named as the information was not yet public.
Baidu declined comment.
The source also said a senior executive from China Mobile 0941.HK who recently resigned, Gong Yu, will head the online video venture.
China’s online video market was worth 162 million yuan ($23.73 million) in the third quarter, according to data from research firm Analysys International, and analysts expect sales to triple in the coming years.
Baidu is also an investor in PPLive, a Chinese website that streams licensed movies and video for free. [nTOE5BT02T]
This week, China's Youku, which operates a video-sharing service similar to Google's GOOG.O YouTube, told Reuters it expects to record a profit within three years, after which it may list in New York or Hong Kong. [ID:nTOE5BU02A] ($1=6.826 Yuan) (Reporting by Melanie Lee; Editing by Doug Young and Anshuman Daga)
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