As Alibaba ventures into the social media and social commerce segments of its investment portfolio, a $586m investment into Weibo, China's equivalent to Twitter seems bang on target to its corporate strategy, which is to have greater access to user data and buying trends across Alibaba e-commerce platforms and other future e-marketplaces.
China-based online trading site Alibaba Group has invested $586m to purchase shares of Weibo Corporation, a instant messaging subsidiary of Sina, a Nasdaq-listed online media company.
The shares purchased included preferred and ordinary shares and represented approximately 18% of Weibo on a fully-diluted basis.
Sina has also granted an option to Alibaba to enable Alibaba to increase its stake in Weibo to 30% on a fully-diluted basis at a mutually agreed but undisclosed valuation within an undisclosed period of time, according to reports.
The two companies would co-operate in the areas of user account connectivity, data exchange, online payment and online marketing, and would explore new business models for social commerce based on the interactions of users on Weibo and on Alibaba’s e-commerce platforms.
Sina already has several entities affiliated with Alibaba, including a strategic alliance with Taobao (China) Software and Zhejiang Tmall.com Technology Co, to jointly explore social commerce and develop marketing solutions to enable merchants on Alibaba e-commerce platforms to better connect and build relationships with Weibo users, according to China Daily news report.
