China's second largest online video site Tudou reported a net loss of 148.9 million yuan ($23.6 million) in the fourth quarter of 2011, compared with a painful loss of 263.7 million yuan ($41.9 million) a year ago.

The loss was in large part attributed to growing costs on video programs and broadband Internet services. Tudou said its operation costs in the fourth quarter more than doubled from the previous year to 160 million yuan ($25.4 million).

"Despite growing user traffic, a major cause for concern is Tudou's weakness in advertising revenues," said Zhang Fan, an analyst with the Beijing-based consulting firm Analysys International. "Tudou lacks a stable source of high-end ad clients."

"Thanks to a close tie-up with Weibo, a popular micro-blogging site, Tudou is enjoying torrid growth in users," added Zhang. "But the expanding customer base has yet to translate into profits."