Internet major Alibaba was once known as Chinas answer to eBay. Now it is forging closer ties to the countrys counterpart to Twitter. Alibaba has agreed to buy an 18 per cent stake in the Sina Corporations Weibo,the most popular of Chinas microblogging services,for $586 million. It has the right to raise its stake to 30 per cent in the future.
Alibaba and Sina also agreed to cooperate in improving ways to marry social networking with e-commerce,as microblogging services like Sinas continue to grow in popularity. Sina Weibo said last year that it had over 46 million users,an increase of 82 per cent from the period a year earlier.
That remains a fraction of Twitters user base,however. And a recent study of about 30,000 Sina Weibo users found that about 57 per cent of the sampled accounts had no measurable activity or posts. Alibaba continues to grow,most recently being valued by analysts at more than $55 billion. It has reshuffled its management ranks ahead of a hotly anticipated IPO that could come as soon as this year.
The growth of social networking and its close ties to the continuing boom in mobile Internet usage have prompted a natural response: how to make money from 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.