yoqoo.gifThe YouTube phenomenon is spreading to China, or at least that's what YoQoo hopes.

The six-month-old video-sharing site, which was founded by former Sohu boss Victor Koo, has just raised $12m
in funding from a group of VC firms, including Silicon Valley's Sutter
Hill Ventures and Chengwei Ventures, which claims to be one of the
first independent VC funds in China.

The company says it is one of the top video sharing and distribution
platforms in China with thousands of videos uploaded each day by both
consumers and media organisations.

Yoqoo.com has been in beta test since it opened in June and it will officially launch later this month.

In the west, critics argue that YouTube, despite its huge popularity, has yet to create a sustainable business model.

In China, the economics are more challenging because of the relative
novelty of internet advertising and the difficult regulatory
environment for video sharing and other social technologies.

It will be interesting to hear YoQoo manages to solve this big
challenge of how to “monetise” its user base — and whether it can
sustain VC interest in an investment theme — user-generated content —
that already suffers from a great deal of hype.

This week, local press rumours
variously had Baidu, China's leading search engine, in talks with
online video sites Tudou.com and 56.com about an acquisition, while
rival Google was supposedly also looking to acquire a Chinese online
video site or find a local partner to produce a Chinese version of its
own Youtube video-sharing portal.

More on social networking in China in this earlier story.