Alibaba is making the proposal with the support of the founding shareholders of Youku, including Victor Koo, Chengwei Capital and their affiliates.
Youku Tudou is a mix of YouTube (user generated content) and Netflix (licensed premium content and in house productions).
Strategically Youku Tudou could become for Alibaba not only what YouTube is for Google but, more importantly, what Instant Video is for Amazon: An attractive, highly scalable (high fixed costs, low variable costs) business that Alibaba could use to bundle with other services.
Also of note: Besides the infrastructure that Youku Tudou has built for itself this is purely a home market play for Alibaba right now. Youku Tudou has no international foot print whatsoever.