Alibaba to buy US$1.22 billion stake in video-sharing firm Youku Tudou
US$1.22b investment inYouku Tudou is partof venture into the entertainment industry
Mainland e-commerce titan Alibaba Group continues its spending spree by announcing it is buying into Youku Tudou with a US$1.22 billion outlay.
Alibaba and Yunfeng Capital, a private equity firm co-founded by its founder Jack Ma Yun, will buy the stake in the video-sharing website - mainland's Youtube - with Alibaba holding 16.5 per cent of the stake and Yunfeng 2 per cent, according to a Youku Tudou statement. The deal will close in the "near future".
With its initial public offering slated for the next few days in the United States, Alibaba has transformed the scale of its operations with about 40 billion yuan (HK$49.6 billion) in investments since Ma stepped down as chief executive last year.
Li Zhi, the chief analyst at Analysys International, said Alibaba was completing its foray into the entertainment sector.
"Video is an important part of online entertainment business, which is a market with huge potential, and Alibaba has the resources to expand in this market," Li said.
She said Alibaba had set up a well-rounded entertainment business structure, with music, reading, games and now video.