Chinese Internet video website Letv.com is launching a cloud computing service to better position itself for longterm growth.

The new cloud computing company has registered capital of CNY50 million and its operating scope of business covers the Internet data center business, Internet access service, and information services. The related activities include technical development, technical services, sales, design, production, proxy, and publishing.

In China, a defined scope of business is necessary for all types of companies. And the scope of business defined in Letv.com's business license gives it a wide area in which to maneuver. Furthermore, it's operational areas like Internet data center business are open currently only to Chinese companies, so the company need not worry about foreign competition in this space.

Yang Yongqiang, chief technology officer of Letv.com, said during an interview with local media that the detailed operating statistics are unavailable since the company was just established. Yang also said that cloud video will become a new trend in the development of video websites. Many Chinese video websites, including Iqiyi and Youku, have started investing in this sector. Meanwhile, Letv.com is the first to treat it as an independent business.

Yang revealed that by separating a unit from Letv.com and setting up a new company, they can extract services like database establishment and virtual machine and make them public resources which can not only serve Letv.com, but also can be used by third-party customers. Letv.com's cloud computing company will help reduce marginal costs and develop more flexible business models.