Alibaba expands its footprint into media

Alibaba Group Holding Ltd, China's Internet conglomerate, will spend about $800 million buying the control of a Hong Kong-listed media group, a move that will enable the e-commerce giant to tap into digital content production.

Alibaba will pay HK$6.24 billion ($804 million) for a 60 percent stake in ChinaVision Media Group Ltd, which has a rich business portfolio from print media, television and films to mobile games.

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The purchase of ChinaVision Media's new stock, at a 22 percent discount to the last closing price, will take the stake held by Alibaba and parties acting with it to 70.8 percent, according to a ChinaVision filing to the Hong Kong stock exchange on Tuesday.

The investment from Alibaba pushed the share price of ChinaVision up about 186 percent to HK$1.83 on Wednesday from the previous closing price of HK$0.64.

The deal is Alibaba's second major move in the merger and acquisitions field this year after the Internet titan bought mapping service AutoNavi Software Co Ltd in February for a price of $1.1 billion.

The deal was designed to help Alibaba to access ChinaVision's television programs, films and other digital content, which are experiencing surging demand from China's rapidly growing number of mobile Internet users.

"The demand to acquire data and content over mobile and mobile-related devices is absolutely enormous," said Colin Light, China digital consulting leader for PricewaterhouseCoopers in Hong Kong. The deal enables Alibaba to leverage its huge mobile and Internet-based users into an adjacent market, namely content media, he added.

In a telephone interview with China Daily, Light said observers have seen a dramatic trend around the world that media consumption is shifting from big screens, such as televisions, to small screens on mobile devices.

The shift is particularly strong in China, where more than 80 percent of Chinese Internet users access the Internet via mobile devices. The shift of media is expected to lead a shift in advertising money, according to a recent report from PricewaterhouseCoopers.