Tuesday, April 30, 2013

Alibaba and Sina formally co-announced that Alibaba will acquire 18% share of Sina Weibo in 586 million USD.

Today, Alibaba and Sina formally come to an agreement that Alibaba will invest in Sina Weibo, and Alibaba will acquire 18% share of Sina Weibo.

The press release by Sina said:

The two companies will cooperate in the areas of user account connectivity, data exchange, online payment and online marketing, among other things, and will explore new business models for social commerce based on the interactions of the hundreds of millions of users on Weibo and on Alibaba’s e-commerce platforms. The strategic alliance is expected to generate approximately $380 million in advertising and social commerce services revenues in aggregate for Weibo over the next three years.

  Separately, the Company announced that Alibaba, through a wholly owned subsidiary, has invested $586 million to purchase preferred and ordinary shares representing approximately 18% of Weibo on a fully-diluted basis. SINA has also granted an option to Alibaba to enable Alibaba to increase its ownership in Weibo to 30% on a fully-diluted basis at a mutually agreed valuation within a certain period of time in the future.

As I explained before, the rumor of this investment existed from last year. But because Sina Weibo provided their own payment system "Weibo Wallet", and there are some reasons, so it was said that the possibility of this rumor was slowing down.

Let's continue watching their specific action from now on.

Source => Press Release, Sina Tech

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