Feeds

Rupert and Wendi go shopping in China

Grab stake in P2P giant ahead of US$200m IPO

The Essential Guide to IT Transformation

The Murdochs are taking another stab at the Chinese media market, confirming a US$29.4 million stake in Chinese P2P video site Xunlei, which has filed for a US$200 million Nasdaq IPO.

Rupert Murdoch and his wife Wendi made the investment via one of their private investment, vehicles RW Investments (yes, it stands for Rupert and Wendi) not via News Corp, in April.

In a cosy tryst, they join fellow investors Google, holding a 2.8 percent stake following a $5 million investment in 2007, and publisher IDG which has a 12.2 percent shareholding. Former Google China VP Kai-Fu Lee is also joining Xunlei as an independent director.

The Chinese "You Tube meets BitTorrent" site, Xunlei, which means ‘Swift Thunder’, launched in 2004 and generates most of its revenue from online advertising.

Ironically for Murdoch, the site is also China’s largest user of the BitTorrent protocol.

In its IPO filing for the US SEC Xunlei reveals that it has been involved in litigation based on infringement allegations from content owners. Recent activity includes 108 lawsuits in 2009, 126 lawsuits in 2010 and 10 lawsuits to March 2011 in China, all for alleged copyright infringement.

The company also warns in its IPO that a law firm representing the Motion Picture Association of America has flagged that some of its members may make claims of copyright infringement against Xunlei, and have requested that it enters into a content protection agreement with them in order to stop the action.

The company currently has 33 copyright infringement lawsuits still pending with claimed damages of around US$3.4 million.

Xunlei also offers cloud services for storing media content, including its own streaming video portal Xunlei Kankan, for which it claims 120 million monthly visitors, and also operates a subscription service and its own media player software. Market estimates put its current active members at the 290 million mark.

According to Chinese market research firm iResearch, Xunlei owns 3,600 servers and has over a million third-party servers running its P2P software. The Xunlei server farms maintain and update an index of over 3.7 billion digital media files available on third-party servers and PCs connected to Xunlei's resource discovery network.

The company claims that it will use the proceeds of its IPO for data centers, content acquisition, game licenses, technology development, working capital and potential acquisitions.

The IPO will be underwritten by J.P. Morgan, Deutsche Bank Securities, Cowen and Company, Needham & Company, LLC, and Stifel Nicolaus Weisel. ®

Boost IT visibility and business value

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.