BEIJING, April 29 -- Chairman and CEO of Youku Tudou Victor Koo told Xinhua on Monday night that strategic cooperation with Alibaba will benefit the video platform's payment service, targeted advertising and customer resource expansion.

Alibaba and private equity firm Yunfeng Capital will buy an 18.5 percent stake in Youku Tudou, China's leading online video platform, for 1.22 billion U.S. dollars, according to an Alibaba statement on Monday.

Alibaba will hold 16.5 percent while Yunfeng Capital will hold two percent. Alibaba's founder and chairman Jack Ma is a co-founder of Yunfeng Capital.

Youku Tudou will take advantage of millions of small and medium-sized enterprises running on Alibaba's e-commerce platform and develop its payment service, said Koo.

"Youku Tudou has more than 400 million users," he said. "From an advertising perspective, cooperation with Alibaba on big data will boost our fee-based businesses."

Alibaba, keen to expand out of its core online retail business, has expanded its reach to include shopping malls, home appliances, mapping services, media and financial services through a series of acquisitions in the past year.