Alibaba Conducts Strategic Review of Youku and Tudou Amidst Rivalry with Baidu and Tencent

Alibaba Group Holding Limited BABA weighed options for its video entertainment assets. The company is conducting a strategic review of video streaming platforms Youku and Tudou, Bloomberg cites familiar sources. 

It also evaluates options to inject the assets into Alibaba Pictures Group Ltd and bolster its scope. 

Alibaba eyes a family of standalone leaders in businesses from e-commerce and media to cloud and logistics. 

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The company announced a dramatic management restructuring in June, replacing its veteran chief Daniel Zhang.

In China, Youku competes against Baidu, Inc BIDU IQIYI, Inc IQ, and Tencent Holdings Ltd TCEHY. The rivalry triggered a price war that proved unsustainable.

Alibaba Pictures is behind some of China's highest-grossing movies, like Wolf Warrior 2, The Wandering Earth, Dying to Survive, and the Oscar-winning Green Book.

Once rivals, Youku merged with Tudou in an all-stock deal worth about $1 billion in 2012. 

Alibaba bought out the U.S.-listed Chinese video site in 2016 in a $5.1 billion deal. 

Youku has been facing challenges from the likes of Bytedance Ltd's Douyin.

Alibaba's digital media and entertainment business narrowed its losses in the first quarter following Youku's investment in content and production capability.

Price Action: BABA shares are trading lower by 0.31% at $83.78 premarket on the last check Wednesday.