Alibaba buys 28% in Chinese map-nav firm AutoNavi
11 May 2013
Alibaba Group, China's largest e-commerce company, is acquiring a 28-per cent stake in Chinese digital mapping and navigation firm AutoNavi for $294 million.
The investment would make Alibaba the largest shareholder of Nasdaq-listed AutoNavi after the company's CEO, Jun Hou, who holds 16.7- per cent stake.
The move comes after Alibaba, run by its founder Jack Ma, last month acquired an 18-per cent stake in Chinese Twitter-like microblogging site Sina Corp's Weibo. (See: Alibaba Group to buy 18% in Chinese Twitter-like site Weibo for $586 mn).
Beijing-based AutoNavi, which completed a $100-million IPO in 2010, is the most popular mapping app in China and competes with those of Google, Baidu and others.
It holds a 45-per cent market share according to research firm Analysys International and passed 100 million downloads in January. It has 116 million users of its free mobile app and 56 million monthly active users.
Apart from its mapping and navigation app, AutoNavi has business deals with other tech companies like Apple, Micosoft's Bing, Chinese search giant Baidu and Sina. It provides built-in data in Apple iOS 6 and Google users in China, as well as mapping services to Baidu.
Joseph Tsai, executive vice chairman of Alibaba, and Eddie Wu, president of Alibaba's mobile products division, will join AutoNavi's board of directors when the deal closes ''in the near future.''
''Our new alliance with Alibaba highlights the importance of map applications as a key entry point for mobile services in the age of smartphones,'' said Congwu Cheng, AutoNavi's chief executive officer, in a statement.
''With Alibaba's support, AutoNavi will be able to establish a massive platform of points of interest related to the kinds of services our users seek every day. The alliance will also enable us to create an innovative monetization model by providing consumers with a one-stop service application that integrates merchant information with POIs search, data mining, payment, and other e-commerce activities,'' he added.
The Weibo and the AutoNavi deal comes as analysts speculate that Jack Ma is likely to step down as chief executive prior to an initial public offering slate to be sometime this year. They go on to add that the company could fetch a valuation as high as Facebook's $100 billion.
