While it was Amazon chief executive Jeff Bezos who bought The Washington Post for $250 million last year, it’s Amazon’s rival in China, Alibaba, that by all accounts is now pushing into newspapers and online media in earnest.
Rumours are flying around that Alibaba may be eyeing a stake in Hong Kong-based newspaper South China Morning Post*, after it already paid close to $200 million for a stake in China Business News — a television and newspaper company — in June.
Alibaba may also be eyeing a stake in Sina Corp, the company behind online news site sina.com.cn (its tech section widely covers the China tech scene in Chinese language) and Weibo, a hugely popular Chinese microblogging service similar to Twitter. Weibo claimed around 200 million monthly active users as of the first quarter of this year.
If the rumours are true, it’s telling of Alibaba’s overall strategy. According to Huang Guofeng, an analyst at Internet consultancy firm Analysys International in Beijing (cited by China Daily), Alibaba likely has a “big vision to enter people’s living rooms.”
That big vision became even more apparent last month when Alibaba offered $4.2 billion to buy out the remaining shares in Chinese video-streaming giant Youku Tudou (think of it as the YouTube of China, with over 500 million monthly unique visitors). That deal finally closed for around $3.7 billion last week.
Like Amazon, Alibaba is also pushing into on-demand video-streaming services (a push that could be seen as competing with Amazon Prime Instant Video and Netflix).
Commenting on the China Business News investment at the time, Alibaba said the strategy was “to leverage both companies’ Internet technology and media resources in order to penetrate China’s financial information services industry.”
Alibaba believes it has a trove of customer data, ecommerce statistics, and sales trends that could help enterprises make investment decisions. While Bloomberg noted that the deal marked its “entry into the business of providing news and information for investment,” the strategy behind a stake in South China Morning Post isn’t yet clear.
As an influential newspaper and online publication in Asia Pacific (not just in China), an SCMP stake would likely signal an even more aggressive move into the space — as would a stake in online media powerhouse Sina Corp (though Sina is still more walled in to China than is SCMP).
Coming back to his acquisition of The Washington Post, Bezos said in December last year, “I didn’t know anything about the newspaper business, but I did know something about the Internet. That, combined with the financial runway that I can provide, is the reason why I bought The Post.”
Alibaba’s thinking may be along similar lines, and SCMP could be curious about what it can bring to the table in terms of staying relevant (and monetizing) online.
In an age when all traditional media outlets (i.e. newspapers) are having to compete online to stay in the game, it makes sense for them to bring in investors from the Internet and technology industry to spearhead online strategy.
So do the rumors about Alibaba’s big media expansion hold water? The company is staying mum, but Tian Hou, an analyst at TH Capital in Beijing, told China Daily that it’s “very likely.” I certainly wouldn’t bet against it at this stage. Whether the SCMP/Sina deals go through or not, Alibaba has made its intentions clear.
As to what it signals for editorial integrity and independence at such publications? That’s another, much trickier question.
Editor’s note: The author of this story previously worked for the South China Morning Post.