E-commerce giant buys 18 percent stake of Weibo

E-commerce giant Alibaba has purchased 18 percent stake of China's popular microblogging service Sina Weibo for $586 million, Sina Corp. announced.

Sina said in a statement on its website Monday that its subsidiary Weibo and Alibaba China has signed an agreement for strategic cooperation to capitalize on their respective advantages in social networking and e-commerce, reported Xinhua.

They will cooperate in the fields of user accounts sharing, data exchanges, online payment and online marketing, and explore an effective model of socialized e-commerce based on Weibo's large user base and Alibaba's business platform, the statement said.

"The strategic cooperation is expected to bring Weibo about $380 million of revenue from marketing and socialized e-commerce in the next three years," the statement said.

Alibaba bought about 18 percent of Weibo's stake by paying $586 million for its preferred and common stocks.

Alibaba has the option to raise its stake to 30 percent in the future by stipulated way of pricing, according to the statement.

Cao Guowei, Sina's chairman and CEO, said the cooperation with Alibaba will allow Weibo to make sturdy and imaginative strides in establishing a unique business model.

Alibaba's board chairman Ma Yun said the cooperation of the two platforms is not only conducive to Alibaba's distribution and development in the mobile internet field, but also bring Weibo users more unique and long-lasting services.

Weibo is the most popular microblogging service in China. Its users surpassed 500 million by the end of 2012, up 74 percent from a year earlier, the company's data showed.