Alibaba splurges half a billion on a slice of 'Chinese Twitter'
E-tailer sees commercial opportunity in Weibo
Alibaba has moved into social media with a $586m splurge on an 18 per cent stake in China's Twitter, Weibo.
The Chinese e-tailer nabbed the microblogging site stake from Sina on Monday, valuing Weibo at more than $3.2bn. The companies reckon that their alliance will generate $380m in advertising and other revenue for Weibo in the next three years.
“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 platforms to take advantage of the traffic shift toward social and mobile Internet," Sina chair-cum-CEO Charles Chao enthused in a canned statement.
Alibaba's founder and chair Jack Ma said the alliance "affirms our view of the vitality and importance of social media in unleashing value in ecommerce activities".
The e-tailer has the option of raising its stake in Weibo to up to 30 per cent at a mutually agreed price within a certain amount of time, according to Sina. ®