Alibaba on the media acquisition trail again

Media organizations with direct and indirect investment from Alibaba Group Holding Ltd. [Photo/China Daily]

E-commerce behemoth Alibaba Group Holding Ltd not only encourages people to buy, but also snaps up bargains when it can.

After a string of investments in news organizations, social media and online video sites, the Hangzhou-based company seems to be inching closer toward its target of building a nationwide media empire.

Hong Kong-based SCMP Group Ltd, which publishes the English-language newspaper the South China Morning Post, said that it has been approached by a third party that is potentially interested in acquiring its media assets, two weeks after market rumors that Alibaba's Jack Ma is considering buying a stake.

"The board confirms that the company has received a preliminary approach from a third party regarding its interest in a possible purchase of the company's media assets," SCMP said in a filing to the Hong Kong stock exchange on Wednesday.

Reached by China Daily on Thursday, Alibaba's public relations office said it has no comments on market speculation. Alibaba, however, does have a track record of buying traditional media as well as new media.

Statistics show that at least 24 media organizations, from financial news outlet China Business Network to online video giant Youku Tudou Inc, are owned or invested in by Alibaba and its affiliated companies.

Tian Hou, an analyst at TH Capital in Beijing, said Alibaba's investment in SCMP is "very likely".

"With Alibaba's business spreading its wings to more industries and growing into a magnificent size, it needs to have the power to sway media coverage to protect itself," she said, adding many big multinationals in the West have made similar investments.

Huang Guofeng, an analyst with Internet consultancy Analysys International in Beijing, said Alibaba may have a bigger vision than that.

"It is clear that Alibaba is no longer satisfied with attracting people via smartphone screens or personal computer screens," Huang said.

It also wants to expand its presence in the living room and reach more customers via television sets, Huang said. "By acquiring all these media organizations, Alibaba has gained many content producers, be it business news or entertainment shows.

"Alibaba is looking for more content so that it can attract more viewers to the products on its online platforms," he said.

Patrick Shum Hing-hung, investment manager at Tengard Fund Management, said what is at stake here is that, if Alibaba is successful in the SCMP deal, then it needs to leverage on its various Internet platforms to promote SCMP.

"Operating an integrated Internet news platform is not easy as it requires much more audience interactivity and infographics input. I predict the success rate will not be high for a traditional newspaper mindset like SCMP," he said.