Reuters earlier this week caught wind of the company's plans to launch the Hulu-like destination site, and also reported that Hulu investor Providence Equity Partners was going to have a significant stake in the venture.
It cited local websites who reported that the joint venture company had received about $60 million in private equity funds, with Baidu investing about $10 million into the new firm. Baidu didn't provide any details about the size of its investment (let alone names of other backers) in today's statement.
According to the release, the new company will work with content providers to provide copyrighted video content including movies, TV series, sporting events, animation and other varied content to Internet users through an ad-supported model.
It's worth noting that Baidu took a 8.3 percent stake in UiTV, a Chinese online TV firm, back in September 2008. It is also an investor in PPLive, a Chinese website that streams licensed movies and video for free.
Yu Gong, formerly president and COO of China Mobile's 12580 business, has been appointed CEO of the yet unnamed new company. Prior to his position as 12580, Gong was chief operating officer of SOHU.com, a Baidu rival in online search.
According to eMarketer, China will have 518 million Internet users in 2010. The size of the country's online video market was approximately 162 million yuan ($23.73 million) in Q3 2009, according to data from research firm Analysys International, and analysts expect sales to triple in the coming years. Not everyone is as optimistic, though.