• by Gavin O'Malley  @mp_gavin, November 27, 2007

It might take a bit longer for YouTube to rule the world now that Youku.com, a video-sharing site and one of China's rising upstarts, has received another $25 million in private equity funding.

The investment will go toward expanding the company's sales and marketing efforts, along with research and development, and improved video service standards.

China now has the fastest-growing online population worldwide. Second only to the U.S., China's 160 million Web users represent the second-largest global market.

Unlike social networking sites--which are now a dime a dozen in China--video-sharing sites like Youku face major barriers to entry. Along with higher infrastructure costs associated with video storage, the Chinese government is scrutinizing online video as harshly as it oversees TV programming.

Thanks to strategic partnerships like its deal with Baidu, China's most popular search engine, Youku has established an early lead since its launch last December. Indeed, the site now streams over 70 million videos daily, according to its founder and CEO Victor Koo.

As a result, Youku has attracted a long list of foreign and domestic brands, including Ford, Hewlett Packard, Dell, Samsung and Chinese game developer Shanda Interactive Entertainment Limited.

"Online video is rapidly changing the media landscape both in the U.S. and China," says Len Baker, managing director of Sutter Hill Ventures, which first invested in Youku one year ago. "We are confident that Youku's management team will execute its business plan and capitalize on this tremendous opportunity in China."

Other firms participating in this latest round of investment included Brookside Capital Partners, Bain Capital, Farallon Capital, and Chengwei Ventures.

Prior to this latest round, Youku completed two rounds of venture financing of $15 million in total from Sutter Hill Ventures, Farallon Capital and Chengwei Ventures.