Chinese e-commerce firm Alibaba has acquired 18% stake in online media company Sina Corp’s microblogging site Weibo for $586m.
Alibaba also has the option to increase its stake to 30% in the future at a mutually agreed valuation within a certain period of time.
Both the firms said that they will cooperate in the areas of user account connectivity, data exchange, online payment and online marketing.
The companies will also 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 agreement is expected to generate about $380m in advertising and social commerce services revenues for Weibo over the next three years.
Sina chairman and CEO Charles Chao said that the company’s believes that e-commerce will play an important role in building an eco-system around Weibo’s open platform.
"Weibo and Alibaba’s e-commerce platforms are natural partners," Chao said.
"Together we provide a unique proposition not only to existing online merchants, but also to individuals or businesses, who wish to offer products and services on social networking platform to take advantage of the traffic shift toward social and mobile Internet."
Alibaba chairman Jack Ma said: "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."
In August 2010, Alibaba acquired Auctiva, a provider of a variety of listing, marketing and management tools.
