Baidi, China's major search engine and Internet presence, is partnering with Hulu investors, Providence Equity Partners, to launch an ad-supported online video service in China.

According to a press release issued this week, the pair are currently in the process of licensing premium content to populate the site, including movies, popular TV series, and sports content. Citing a source "familiar with the situation," Reuters reports the joint venture has already received $60 million in private equity funds, to which Baidu will add around $10 million.

Yu Gong, a former exec at China Mobile, has been appointed to head up the newly formed company. Commenting on the announcement, he described online video as "a rapidly growing sector in China," and recognized "an increasing demand for premium content."

Given the recent boom in online video consumption in the U.S. and Europe, the Chinese market -- with arguably the world's largest online population -- could prove a highly lucrative market. In addition, Baidu's established brand and local online presence will no-doubt help kick start the project.

At this stage there's no indication of what types of ad opportunities might be available, but Reuters claims the service is set to launch within the first three months of this year.