Alibaba plans stake buy in China's most popular microblogging service: paper

SHANGHAI Sun Nov 18, 2012 10:08pm EST

An employee walks past a logo of Alibaba (China) Technology Co. Ltd during a media tour organised by government officials at its headquarters on the outskirts of Hangzhou, Zhejiang province June 20, 2012. REUTERS/Carlos Barria

An employee walks past a logo of Alibaba (China) Technology Co. Ltd during a media tour organised by government officials at its headquarters on the outskirts of Hangzhou, Zhejiang province June 20, 2012.

Credit: Reuters/Carlos Barria

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SHANGHAI (Reuters) - China's largest e-commerce company Alibaba Group ALIAB.UL is planning to buy a stake in Sina Corp's (SINA.O) Weibo, the nation's most popular microblogging service, China Business News reported on Monday.

Alibaba declined to comment on the report.

Sources in Alibaba told the official newspaper, which is owned by the Shanghai municipal government, that investment negotiations between Alibaba and Sina have entered the final phase.

Alibaba has valued Sina Weibo at around $3 billion, the sources said. The report quoted other domestic media sources who reported that Alibaba plans to buy a 15-20 percent stake in Sina Weibo.

Alibaba, which runs Taobao Marketplace, China's largest e-commerce website with a consumer focus, and Alibaba.com, China's largest business-to-business commerce platform, has a business model that revolves around online advertising and subscription fees.

"We see the potential deal is synergetic to both parties," Credit Suisse said a research note, published in reaction to the rumor.

Alibaba's investment in Weibo will help drive web traffic to Taobao, while providing incremental advertising revenue to Sina Weibo, the note said.

Credit Suisse said that the reported valuation was lower than its internal valuation of $4.4 billion but higher than the implied valuation of $1.8 billion based on Friday's closing share price. (Reporting by Chen Yixin and Pete Sweeney; Editing by Muralikumar Anantharaman)

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Comments (1)
ShiHeZiU wrote:
It had better not,I don’t like that.

Nov 19, 2012 5:29am EST  --  Report as abuse
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