Alibaba Buys 18% Stake in SINA's Weibo Platform

In an effort to enable marketers to reach users of its Weibo platform, Chinese online media company SINA (NASDAQ: SINA  ) will be working with Chinese e-commerce specialist Alibaba to develop a platform to connect the two.

Alibaba will also be investing $586 million in Weibo, giving it an 18% ownership stake in the company, SINA announced today.

Weibo is China's version of Twitter and the two companies will cooperate in user account connectivity, data exchange, and online payments and marketing as they seek to "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."

SINA chairman and CEO Charles Chao was quoted as saying, "We are excited to partner with the largest e-commerce platform in China to develop social commerce. We believe e-commerce will play a vital role in building an eco-system around Weibo's open platform."

The collaboration is expected to generate approximately $380 million in advertising and social commerce services revenues for Weibo over the next three years.

In regards to Alibaba's investment in Weibo, SINA granted an option for Alibaba to increase its ownership to as much as 30%.

SINA is an online media company comprising Internet portal SINA.com, mobile portal SINA.cn, and social media platform Weibo.com. It generates the majority of its revenues from online advertising, mobile value-added services, and fee-based services.

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