VentureBeat

Youku.com, Tudou.com and 56.com may be the most popular video-sharing sites in China, but within the last few months, they’ve all suffered from downtime — due to what each of these venture-backed companies have said are technical problems.

There’s another angle, though. Online videos are a great medium for sharing things like porn or political dissent, two things the Chinese government sometimes censors.

The Chinese government appears to have shut down 56.com, starting yesterday. More from Ogilvy blogger Kaiser Kuo, who has been following the video-shutdown story for some time:

The shut down — the second to impact a top-tier video sharing site — was in discussion for a few weeks, the insider said, and the timing of the outage “probably has nothing to do with” the anniversary of the suppression of the student uprising of 19 years ago.

The official reason for the site going offline: Server malfunctions. The company, which also makes slideshows widgets similar to those of Slide or RockYou, has received $20 million in funding from Japanese firm Hikari Private Equity and Susquehanna International Group China.

[Update: Sequoia Capital and Disney's Steamboat Ventures have also invested in 56.com and Intel Capital may have as well. My source about those investors mentions the irony that Disney would invest in the company which, like its competitors, hosts large amounts of pirated content. Duncan Riley also emphasizes the piracy issue, in comments, below.]

This past winter, the Chinese government introduced new regulations that require any new video site to have a license showing that it is majority-owned by a government-controlled business. A grandfather clause in the regulations, as China Web 2.0 Review reported, appeared to have made these three sites exempt from that rule. It is my understanding, from talking to these companies, that not one has actually obtained any sort of operating license, in any case.

Notably, one of the others, Tudou.com, was apparently shut down for one day in March. The company has raised a total of $85 million from firms like IDG, Granite Global Ventures and General Catalyst and other foreign investors. It competes neck-and-neck with Youku.com. Both claim to have more than 100 million video views per day; while traffic measures in China are not always trustworthy, both are generally considered larger than 56.com. Like 56.com, Tudou said it went offline because it was moving servers — but other reports suggested censorship. From a post at the time by Kuo:

I’ll leave everyone to draw their own conclusions about what actually happened. There’s a story on Sohu.com about [the shut down] here, which makes reference to (unnamed, unsourced) reports about a document supposedly handed down from SARFT central to its Shanghai bureau, called “Shutdown Order Sanctioning Tudou’s Conduct in Violation of Regulations on Internet Audio-Video Services ” — my loose translation — which according to the Sohu story, order an indefinite shutdown pending rectification and reform for ineffective controls of pornographic content.”

Of course, there are real technical challenges to running any large video site. Even YouTube, the largest video site in the world, has at times gone offline.

Youku, the third video site, was also offline for a short time earlier today. Between the three, it appears to be the most clear-cut case of actual server problems, as Kuo also reports.

The company, like its peers, has raised a significant amount of money from foreign firms. Farallon Capital, the hedge fund, led an initial round of $3 million in March 2006. Bain Capital venture subsidiary Brookside Capital Partners led the company’s latest round, for $25 million last fall, with other investors including Sutter Hill Ventures and Chinese firm Chengwei Ventures.

For the conspiracy-sensitive, though, the timing of Youku going offline today — while 56.com is still offline and on the anniversary of Tianenmen Square — seems a bit much to be a coincidence.

There are two moving pieces here. On the one hand, the Chinese government is contemplating how to ease restrictions like free speech, or not — see my interview with Chinese blogger Isaac Mao or my coverage of Facebook in China for more on that. On the other hand, Chinese entrepreneurs and investors know that in many cases, the government will turn a blind eye to things it declares against the law. These Chinese video sites, it appears, are living on the bleeding edge of what’s permissible, emphasis on bleeding.

Apple’s Steve Jobs dealt setback — Former Apple finance chief Fred Anderson now says Apple chief executive Steve Jobs misled him about stock option accounting. Story here, and statement by Anderson here. Question: Will this bring down Jobs?

Ram Shriram weighs in on FCC vote on wireless rule changes — See the Google investor’s VentureBeat column, where he advocates the FCC should take the first step toward opening wireless standards and access when it meets later today (Wed). He says the innovation gap will grow, if it doesn’t. Separate but related: India added 67 million mobile phone users (WSJ sub required) last year alone, more than the 41 million land lines in the entire country.

Google Maps have limited reach — Indian streets, along with the village masses of the Indian countryside, defy Google’s search for order, and so Silicon Valley venture firm Kleiner Perkins, and its investing scout in India, Ram Shriram, have invested in Mapmyindia, according to Content Sutra. Although even Mapmyindia has trouble in India’s own capital.

Blackberry users get VoIP — Iotum’s Talk-Now feature lets Blackberry users see who in their contact list are available to chat with. Now, Iotum has incorporated Jajah’s VoIP service, letting users make low-cost global phone calls with an Internet call.

…while other phone users can get Blackberry features — Users of Windows Mobile 6 phones, including Palm Treos, will this fall be able to use software from BlackBerry that makes these phones work like a BlackBerry. It will load applications like its push email, phone, address book, calendar, browser and so on. We remember Silicon Valley’s investors dismissing Blackberry a few years ago, saying it didn’t understand software. Despite its recent outage, this company isn’t going away.

FunnyOrDie.com continued — Turns out, the comedy site, run by Will Ferrell and Adam McKay, got its capital from Sequoia Capital partner Mark Kvamme. Kvamme became interested, he tells Forbes, when his 17-year-old son, an aspiring stand-up comedian came to him and said there weren’t any good comic sites online. Kvamme’s explains why this is a venture-backed company: On one hand, you have the talent of Ferrell and McKay driving things but they can only do so much, so you also draw on user generated content and voting to do the rest. (Photo via Valleywag).

Chinese video clones keep coming — Ku6.com has received $5 million from DFJ ePlanet Ventures and some others, according to Bill Bishop. Meanwhile, Tudou.com has raised a very large (for China, and for video) $18 million from JAFCO in its third round of financing, and is reportedly valued at about $70 million. This comes after it got more than $9 million from IDG, Granite Global and others.

Check out Zude — It launches May 1. Mashable says it is a better version of the homepage Netvibes, but it is really just a convenient way to drag and drop any content from the Web onto your page.

Peace between MySpace and Photobucket — The announcement is here, but we don’t know how they resolved it.

The proliferation of Twitter continues — When a company spreads virally, it’s a good sign. Twitter, the service that lets people update their friends with their latest goings-on, is finding itself being pulled into various plug-ins for your browser — from 30boxes’ feature, which lets you share Flickr photos, Youtube video and URLs via Twitter, to TwittyTunes, which lets you send a message to Twitter telling friends what music you’re listening to, with a link back to the song and artist.

Controversial company, PayPerPost, now seeking readers — PayPerPost, the company which pays bloggers to post articles about advertisers, just acquired Zookoda, which gives those bloggers another way to distribute their paid posts to readers. Announcement here. Zookoda, of Australia, lets a bloggers update their readers via email whenever they blog a new post. (Presumably, paid articles won’t draw hordes of readers — so now the strategy is to push the posts on people). Zookoda is the second company that listed on our VentureBoard to be sold.