Youku has stepped up its efforts recently with Hollywood studios by using its site to promote American films and streaming whole movies not shown in Chinese theaters.
Alibaba's pitch would be inviting retailers into its ecosystem of online selling platforms, advertising venues (like its Youku Tudou video site), and cloud computing offerings.
Thee offer represents a 30 percent premium to Youku's closing price on Thursday when Youku's shares rose 4.88 percent to close at US$20.43 in New York.