Just days before founder Jack Ma hands the reigns to executive vice president Lu Zhaoxi, Alibaba has struck a deal to buy a US$586 million stake in the Chinese social network site, Sina Weibo.
The purchase will see Alibaba take an 18% stake in Sina Weibo, which will now be affiliated with subsidiaries of the retailer group including Alibaba Group, Taobao and Zhejiang Tmall.com.
The two companies will cooperate in data exchange, online payment and online marketing; they’re looking to explore business models for e-commerce based on the current social platforms. The alliance is expected to generate around $380m in advertising and social commerce services revenue over 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 platform to take advantage of the traffic shift toward social and mobile Internet,” said Charles Chao, chairman and CEO of SINA.