Google Investment In Xunlei To Be Announce Next Week

Written by Tangos on December 26, 2006
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XunleiEarly this month, there was market rumor that Google and Ceyuan Venture will invest in Chinese P2P software and file-sharing network Xunlei. The investment will be announced on January 5th, a report in Sina said. Google China will invest in $5M, and Ceyuan Venture will invest in $15M.

Xunlei, founded in 2003, has been a popular download accelerator for downloading large-files, such as videos and large software. Xunlei has been awarded one of the coolest companies of 2005 by Fortune China. IDGVC invested $1M in Xunlei in its first round funding. In 2005, Xunlei closed its second round funding of $10M from Morningside and IDGVC. “Xunlei (迅雷)” is one of the most searched keywords in Baidu’s top search of 2006 result, which approved the popularity of Xunlei in China.

Xunlei claims its software has been downloaded for over 110M times with about 1.5 million download per day. Leveraging its broad user base, Xunlei is building its online content distribution platform, Xunlei.com, to help content providers to distribute video, audio, emagazine, software and others. It has built partnership with content holders such as Phoenix TV.

Why Google is interested in Xunlei? Xunlei is the second most popular desktop client in China, just after instant messaging software QQ, adding Google toolbar into Xunlei may help Google China to gain its shrinking market share. But it is not necessary to invest in Xunlei to cooperate with them, in fact, Google Toolbar has been added into Xunlei already. Is it also about video advertising, just as the reason Google acquire Youtube? Considering Xunlei’s popularity and Xunlei’s Inmedia video advertising offering, I think it is possible. But Google will need to deal with the copyright infringement problem as well, since many video content in Xunlei are unauthorized copies.

5 Responses to “Google Investment In Xunlei To Be Announce Next Week”

  1. PULSE 2.0 » Blog Archive » Google China’s $5M Investment Rumor into Xunlei on December 28th, 2006 6:37 am

    [...] Google China is interested in Xunlei because it is the second most popular desktop website in China. If Google China invested into Xunlei and placed Google Toolbar as part of the installation, it would help Google penetrate a larger market share of Internet users in China. And also Xunlei is a video-centric web company and since Google acquired YouTube, it proves Google is ready to believe that Internet video is the way of the future.  It would work out perfectly. [Source: China Web 2.0 Review] Share this post:       Related Posts: [...]

  2. bizy on January 6th, 2007 9:58 am

    Google has no problems with piracy. Xunlei is a bigger enabler of piracy than even youtube. The US content rights holders should now add China to the areas from which they want a Google payment to allow Google to keep running their content on Youtube and now Xunlei.

    I am guessing that Google made this deal for the following reasons:
    A. Makes Google’s default search service within the xunlei application
    B.Gives Google a scaled platform on which to start testing video Google ads in China
    C. Starting to ramp up marketing spend to begin to battle Baidu. I think Google has been holding back on some marketing dollars until they felt their product and infrastructure was really in place in China. Now it is, so watch out Baidu. Google could spend on more on marketing in China than Baidu’s total revenue in a year (225-250M USD in 2007) with basically no impact to Google’s global bottom line.

    One bit of complete speculation I heard from a friend in China’s Internet business. Why couldn’t they take the Xunlei technology and roll it out in the US, to compete with all the Bittorrent clients out there?

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  4. China Web2.0 Review » » Xunlei Found: User Generated Resource Center on February 20th, 2007 4:50 pm

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  5. China Web2.0 Review » » PPStream Closed Serie B Funding on March 28th, 2007 11:48 pm

    [...] Since 2007, p2p video service has become hot again as in 2005. Most of China’s p2p video service providers raised their first round funding in 2005. In 2007, Google China announced its investment in Xunlei, UUSee closed its serie B funding of $20M. [...]

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