Alibaba ups stake at Weibo

RetailME Bureau

Hangzhou-based Alibaba Group Holding Ltd has bought an 18% stake in Weibo, a micro blogging website alike Twitter in China and part of Shanghai-based Sina Corp having over 500 million users, for $586 million. This will bring the two entities closer helping them to collaboratively work on user-account connectivity, data exchange and online payment and marketing. The agreement also gives Alibaba the option to increase its stake at Weibo to 30% at a mutually agreed valuation.

Witnessing the growing trend among users to access social networking sites using mobile devices as opposed to computers, Sina has decided to bolster development spending for Weibo. On the other hand, Alibaba is also considering expanding into mobile devices and cloud computing to leverage the online shopping trend using smartphones and tablets. Having an aligned growth strategy in place, both players will be able to build on new business models for social commerce based on the significant number of users on Weibo and Alibaba’s diverse e-commerce offerings.

“E-commerce will play a significant role in building an ecosystem around the micro blogging site’s open platform, making Weibo and Alibaba’s e-commerce platforms natural partners,” remarks Charles Chao, CEO of Sina.