Youku.com, China's leading Internet video company, announced Thursday it would raise $593 million, offering 12.31 million of the American depositary shares priced at $48.18, according to the Oriental Morning Post.

Youku will net about $400 million after accounting for non-tradable shares. The proceeds will be used for technology, infrastructure, product development, video program purchasing and marketing.

The offering will bring in almost twice as much capital as its initial public offering, which raised $203 million for the company when it listed in New York last December.

Youku's second stock issue comes as the firm faces stiffer competition from Shanghai-based rival Tudou, China's second-largest provider of online videos, which resumed progress towards an IPO recently after a brief suspension.

"After the secondary offering, Youku can not only get a huge amount of money to increase its market share, it can also lower share prices to hinder the IPOs of other video companies," said Gong Yu, CEO of Qiyi.com, a subsidiary of Baidu.

Youku is not cash–strapped. It had book value of more than $200 million at the end of March, according to the latest financial report issued by the company.

Fighting with Tudou and other domestic competitors for capital, Youku won a race with competitors last year to be the first to make an offshore IPO and raise funds on Nasdaq.

Youku closed at $33.44 at the closing bell after its initial public offering, 161.25 percent above its IPO of $12.80, the highest one-day jump in a newly issued US stock in five years.

Youku's decision to issue additional stock based on the strong performance will affect the attitude of investors and IPOs of its biggest competitor, said an analyst.

Analysts said Youku has to prepare for its profit margin to shrink as intense competition drives up copyright prices and puts downward pressure on advertising rates.

Youku's reported first quarter revenue of $19.5 million, up 163 percent over last year. It reports net losses of $7.1 million, down 8 percent from last year.

Youku accounted for 23.7 percent of China's online video market in the fourth quarter of last year, compared with 22.5 percent in the third quarter. Tudou's market share dropped from 18.5 percent to 18.1 percent, Analysys International reported.

Gu Yongqiang, CEO of Youku.com, said the company's chief goal must now be to increase its market share.