Ebay buys stake in China's version of Twitter
- Article by: MICHAEL J. DE LA MERCED
- New York Times
- April 29, 2013 - 9:11 PM
Alibaba was once known as China’s answer to eBay. Now America’s Internet auction giant is forging closer ties to China’s counterpart to Twitter.
On Monday eBay agreed to buy an 18 percent stake in the Sina Corp.’s Weibo, the most popular of China’s microblogging services, for $586 million. EBay has the right to raise its stake to 30 percent in the future.
The deal values Weibo at about $3.3 billion — equivalent to Sina’s entire market value as of Friday.
Alibaba and Sina also agreed to cooperate in improving ways to marry social networking with e-commerce, as microblogging services like Sina’s continue to grow in popularity. Sina Weibo said late last year that it had more than 46 million users, up 82 percent in 12 months.
(That remains a small fraction of Twitter’s user base, however. And a recent study of about 30,000 Sina Weibo users found that about 57 percent of the sampled accounts had no measurable activity or posts.)
Meanwhile, Alibaba continues to grow into one of the biggest e-commerce companies in the world, most recently valued by analysts at more than $55 billion. It recently reshuffled its management ranks ahead of a hotly anticipated initial public offering that could come later this year, which is expected to spark widespread investor interest.
The growth of social networking and its close ties to the continuing boom in mobile Internet usage has prompted a natural response: working on how to make money off of the phenomenon.
Sina and Alibaba expect their efforts to yield about $380 million in advertising and commercial revenue for the Weibo service over the next three years.
“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,” Jack Ma, Alibaba’s chairman, said in a statement.
© 2013 Star Tribune