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E-commerce giant Alibaba has purchased 18 percent stake of China's popular microblogging service Sina Weibo for 586 million U.S. dollars, Sina Corp. announced Monday.
Sina said in a statement on its website that its subsidiary Weibo and Alibaba China has signed an agreement for strategic cooperation to capitalize on their respective advantages in social networking and e-commerce.
They will cooperate in the fields of user accounts sharing, data exchanges, online payment and online marketing, and explore an effective model of socialized e-commerce based on Weibo's large user base and Alibaba's business platform, the statement said.
"The strategic cooperation is expected to bring Weibo about 380 million U.S. dollars of revenue from marketing and socialized e-commerce in the next three years," the statement said.
Alibaba bought about 18 percent of Weibo's stake by paying 586 million U.S. dollars for its preferred and common stocks.
Alibaba has the option to raise its stake to 30 percent in the future by stipulated way of pricing, according to the statement.
Cao Guowei, Sina's chairman and CEO, said the cooperation with Alibaba will allow Weibo to make sturdy and imaginative strides in establishing a unique business model.
Alibaba's board chairman Ma Yun said the cooperation of the two platforms is not only conducive to Alibaba's distribution and development in the mobile internet field, but also bring Weibo users more unique and long-lasting services.
SINA Corporation's stock price opened 19 percent higher on Monday as it announced that Alibaba Group has invested 586 million dollars to purchase shares of Weibo Corporation, SINA's wholly owned subsidiary, before the opening bell in New York market.
SINA is a leading online media and Nasdaq listed company, and Weibo is one of its subsidiaries which operates a Twitter-like social media website in China.Its users surpassed 500 million by the end of 2012, up 74 percent from a year earlier, the company's data showed.Alibaba is a leading e-commerce platform.
SINA said several of entities affiliated with the company has entered a strategic alliance with several entities affiliated with Alibaba Group, including Taobao (China) Software Co., Ltd. and Zhejiang Tmall.com Technology Co., Ltd., to jointly explore social commerce and develop innovative marketing solutions to enable merchants on Alibaba e-commerce platforms to better connect and build relationships with Weibo users.
