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bear_bull March 13, 2012 (Chinavestor) If investors agree that earnings or net income drive ultimately stock prices, than we have a problem. Take a look at top and bottom line growth for Baidu.com Inc. (NASDAQ:BIDU) and Youku Inc. (NYSE:YOKU). The prior has been very consistent, reporting solid revenue and net income growth. So its stock price appreciation is well understood.

But Youku Inc. (NYSE:YOKU) has been in the red ever since its IPO with no end in sight of the bleeding. So why the record jump then?

Investors may get a clue by looking at the history of Amazon (NASDAQ:AMZN). That company was not profitable for the first five years yet its stock price skyrocketed during those years. Investors knew that the business model will work eventually. This is what Youku Inc. (NYSE:YOKU) investors have in mind at this point. Considering that Youku Inc. (NYSE:YOKU) has a 21.8% in China's highly fragmented online video market while Tudou Hold. (NASDAQ:TUDO) has a 13.7%, the two will have over one third of all of China's online video market. With a cash pile of $586 million, Youku Inc. (NYSE:YOKU) is expected to lead industry consolidation in China.

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