Alibaba Group to buy 18% in Chinese Twitter-like site Weibo for $586 mn
29 Apr 2013
Chinese e-commerce giant Alibaba Group today agreed to buy an 18-per cent stake in Sina Corp's social-media site Weibo.com for $586 million, valuing China's most popular microblogging site at more than $3 billion.
Weibo.com is the Chinese version of Twitter, featuring microblogging services and social networking services that allow it's over 46 million users to connect and share information with anyone.
Under the deal, Alibaba, controlled by Chinese internet entrepreneur Jack Ma, has the option to raise its stake to 30 per cent in the future at ''a mutually agreed valuation.''
Alibaba and Sina will explore social commerce and develop innovative marketing solutions to enable merchants on Alibaba e-commerce platforms to better connect and build relationships with Weibo users.
The two companies said that they will cooperate in the areas of user account connectivity, data exchange, online payment and online marketing, among other things, and will explore new business models for social commerce based on the interactions of the hundreds of millions of users on Weibo and on Alibaba's e-commerce platforms.
The strategic alliance is expected to generate approximately $380 million in advertising and social commerce services revenues over the next three years.
''We are excited to partner with the largest e-commerce platform in China to develop social commerce. We believe e-commerce will play a vital role in building an eco-system around Weibo's open platform.'' said Charles Chao, chairman and CEO of Sina.
''Weibo and Alibaba's e-commerce platforms are natural partners. Together we provide a unique proposition not only to existing online merchants, but also to individuals or businesses, who wish to offer products and services on social networking platform to take advantage of the traffic shift toward social and mobile Internet.''
''We believe that this strategic alliance helps to create a stronger Weibo. It affirms our view of the vitality and importance of social media in unleashing value in e-commerce activities. We believe that the cooperation of our two robust platforms will bring unique and valuable services to Weibo users, as well as making the mobile Internet a core part of Alibaba's strategy.'' said Jack Ma, chairman of Alibaba.
