Imagine if Amazon bought YouTube. That effectively just happened, but with their Chinese equivalents.

The Alibaba Group, the Chinese e-commerce giant, announced Friday that it has reached a deal to buy Youku Tudou, one of China's leading online video sites, which is said to reach more than half a billion users.

Alibaba will pay roughly $3.7 billion for the company. Alibaba first announced plans to buy Youku Tudou last month, but there was some back-and-forth over the price.

"We are confident that we will strengthen our market position and further accelerate our growth through the integration of our advertising and consumer businesses with Alibaba’s platform and Alipay services," Victor Koo, chairman and CEO of Youku Tudou, said in a statement.

Alibaba raised $25 billion in its IPO just more than a year ago, giving it the distinction of raising the world's largest public offering. Since then, the company has used that war chest to spread its footing through acquisitions and investments in businesses like Jet (for e-commerce in the U.S.), Lyft and Didi Kuaidi (for ride-hailing around the world) and Peel (for the connected home).

Those investments may help broaden Alibaba's market beyond China, which investors worry is facing a slowdown. Alibaba's stock was hit hard in recent months by those concerns, though it has been on the upswing this week after beating earnings.