Alibaba Chairman Jack Ma Pays $1.05 Billion for Stake in Chinese Internet TV Company
The Chinese Internet giant is ramping up a strategic push into the country's booming entertainment sector.
Jack Ma, the billionaire founder of Chinese Internet giant Alibaba Group, is partnering with other investors to pay $1.05 billion (6.54 billion yuan) for a 20 percent stake in Chinese Internet TV company Wasu Media.
Alibaba and Wasu Digital TV Media Group also have signed a separate agreement to cooperate on online content and Internet TV projects, Wasu Media said in a statement released to the Shenzhen Stock Exchange on Tuesday.
"Alibaba and Wasu Group are eager to explore additional possibilities for strategic, business and technological cooperation to meet growing demand in China for more integrated TV, mobile and Internet services," Alibaba said in its own statement.
The move appears to be part of a broader strategy at Alibaba to become more deeply involved in China's booming entertainment sector. Best known for its massive Taobao e-commerce site (loosely akin to the e-bay of China), Alibaba took its first tentative steps into the movie business last week with the launch of Yu Le Bao, a crowdfunding-like service that lets ordinary Chinese make micro-investments in upcoming movies via their smart phones.
Upon launch, the service was swarmed with interested investors, meeting its funding target of $11.77 million (73 million yuan) after just five days. Yu Le Bao likely could have raised tens of millions more had it not capped its initial investment round. An estimated 223,800 investors bought 785,500 shares in a slate of hot upcoming Chinese movie projects, including Jean-Jacques Annaud's Wolf Totem and the next two installments of the popular Tiny Times franchise.
Alibaba is widely expected to make an initial public offering on the New York Stock Exchange soon. The company has been valued at between $150 billion and $200 billion, which makes it larger than Facebook.
Wasu and Alibaba collaborated last year on the launch of a digital TV set-top box that uses an operating system developed by Alibaba.
Wasu, a Shenzhen Stock Exchange-listed company, holds a license granted by the Chinese government to operate an Internet TV service in China.
The investment vehicle that is being used to buy the stake in Wasu is co-owned by Ma and Alibaba co-founder Simon Xie. The duo have often used sideline investment vehicles to make strategic acquisitions linked to Alibaba.