Youku.com (ticker symbol YOKU) is a Chinese online video company which currently enjoys a dominant position in the Chinese online video market as gauged by revenue, but is certainly not without competition. The shares started trading publicly via an IPO on the New York Stock Exchange (NYSE) just this past December, 2010,.

A report in today’s Wall Street Journal (wsj.com) indicates that Youku’s financial performance is improving, although it is not yet profitable and company executives have stated that they don’t know when it will become profitable. For the first quarter of 2011 ending March 31, Youku’s net loss narrowed to $7.2 million from expectations of $8.7 million on revenue of $19.5 million, more than double that of the year ago quarter and easily beating expectations.

The company is also issuing new shares in a secondary offering, looking to raise as much as $600 million as it attempts to raise its capital reserves in preparation to attempt to expand its lead in the Chinese online video market. Youku said the bulk of its new offering will likely be primary shares issued by the company, with the remainder being secondary shares sold by pre-IPO investors, from which Youku won’t receive any proceeds. It didn’t specify the number of shares to be sold or how many primary shares will be offered. When asked if Youku is pursuing its new share offering because the market has improved for Chinese Internet companies, Mr. Victor Koo, Youku’s CEO, said the move is based on business needs, but he also said “you can fairly say that there’s increasing flow of capital from the public and private markets to Chinese internet companies”.

Youku will use the proceeds from its offering for various investments, including in technology, infrastructure and content acquisition, it said. As with other online video companies such as Netflix (NFLX), content costs are expected to increase.

Shares of Youku currently trade at $60.77, more than double their price of $27.00 when the shares first started trading in December.