Google thunders into Chinese P2P video market
Google is getting into the Chinese file-swapping market with a pending investment in Xunlei ("Thunder"). Bloomberg has confirmed the investment after weeks of rumors about the deal, but financial terms have not yet been disclosed.
The Shanghai-based company offers a popular P2P program designed to make the downloading of massive video files quick and easy, and like most such services, it has plenty of unauthorized content available. It also has plenty of users—up to 100 million by some estimates. After watching the company expand through several previous rounds of venture capital funding, the Big G has now swooped in and dangled a large wad of cash before Xunlei just as the company tries to go legit.
Like many Western P2P companies, Xunlei is now trying to leverage its success into legitimacy by partnering with content providers to deliver ad-supported video. That means that the new investment has certain similarities to the YouTube buyout, though it won't involve anywhere near the same sums of money. Both firms built huge user bases by offering video clips of sometimes-dubious legality, and only then tried to make things right with the content companies who indirectly provided their most popular material.
Google has shown a real appetite for risk when it comes to dealing with content creators over the last couple of years. Its core search engine lead to spats over intellectual property questions about web linking, indexing, and automatic thumbnail generation, but Google has recently decided to tangle with much bigger players. The Google Book Search program has generated outrage among many authors and publishers who insist that such a program be opt-in, and they have filed suit against Google to stop it. The YouTube acquisition showed the company's willingness to take on a "copyright lawsuit waiting to happen," and so far YouTube has managed to fend off the wolves.
The new investment in Xunlei shows that Google wants a large piece of another such business in China, one just beginning to craft a legal business model. When seen in conjunction with Google Video and YouTube, it's clear that the company has big worldwide plans for distributing video clips online.
:source: Source: http://arstechnica.com/news.ars/post/20061228-8511.html
