Alibaba buys controlling stake in digital marketing firm AdChina

[HONG KONG] China's e-commerce giant Alibaba Group said on Wednesday it had bought a controlling stake in online marketing company AdChina, an investment aimed at bolstering its advertising business.

Alibaba did not close the size of the deal or the stake it would take in AdChina, a Shanghai-based firm founded in 2007. The internet marketing firm, which generated US$51 million in sales in 2011, had filed for a US$100 million initial public offering in Feb. 2012, but pulled the listing a year later.

The deal is the first Alibaba has disclosed this year, after spending more than US$6.2 billion on acquisitions in 2014, the same year as its record-setting US$25 billion New York listing.

The AdChina investment is geared towards improving Alibaba's online and mobile advertising efforts through Alimama, the group's advertising arm. This unit sells marketing to merchants using Alibaba's e-commerce sites like online marketplace Taobao and online retail platform Tmall.com. "Alibaba's strategic stake is expected to allow AdChina to enhance its competitive strengths in its existing businesses,"said an Alibaba statement.

AdChina will also work with Aliyun, Alibaba's cloud computing business.

REUTERS