What’s On

#mavericksindigital: Alibaba’s next mission? Dominating media

It’s been a busy year for Jack Ma. To date, Alibaba, with Mr Ma at its helm, have spent just north of USD 13.6 billion on acquisitions throughout the year. This is triple the number from 2014! These have ranged from major brick-and-mortar players like Suning to taxi app services like Kuaidi Taxi to online discount sites like Meituan and others.

With these investments, it appears that Alibaba is trying to gain access to almost every part of people’s lives and to ensure that when someone has a need, Alibaba is able to fulfill it, whatever it may be – buying online, securing taxi’s, being entertained through original content and more.

The other area of people’s lives they are now trying to cover off is media. To do this, they have been quite aggressive. In May, Alibaba agreed to pay USD 194 million in China Business News, a domestic financial media company. Then in October, they finally closed the deal with Youku-Tudou with a valuation of around USD 4.4 billion. And finally, just this past week they made the announcement to buy South China Moring Post (SCMP) for USD 266 million.

Not to mention the move Jack Ma made in June when his movie division, Alibaba Pictures, invested in Paramount Pictures’ “Mission Impossible – Rogue Nation”, film, which represented his first investment in a Hollywood blockbuster. This deal made Alibaba the official partner for the movie’s promotion in China, allowing it to handle all the online ticketing, merchandising and promotion.

Clearly with these moves, Jack Ma is looking to expand well beyond his traditional roots as just a builder of e-commerce to now layer on another set of pure media-related businesses that can all be interlinked, monetized and addressable within his entire Alibaba ecosystem.

The benefits to Alibaba are many. Here are five key advantages to how these media acquisitions can help fuel their growing empire:

1. Alibaba will acquire a strong and growing user base from both the Youku-Tudou and SCMP buys that will enable Alibaba to further monetise these properties through their vast data vault of purchase habits its built up over the years

2. With their purchase of Youku-Tudou, Alibaba breaks more into the entertainment game, which compliments their current Netflix-style streaming service TBO and follows the trend of continuing consumption of online video among Chinese

3. They also acquire a strong advertiser base across these new media plays that they can further develop within the larger Alibaba ecosystem to extract greater monetary and lifetime value

4. Alibaba now has access to a ton of new video technology and an immediate competency around producing original programming that can help power other Alibaba properties

5. Alibaba has an enormous existing base of Alipay users who are ready at the drop of a dime to start spending. These new media properties, when connected with Alipay, will allow users to gain quick access to great content

From a media executive point of view, this certainly is within the trend of continuing global consolidation within the technology and media worlds. In my opinion, The SCMP move is good as Alibaba can help revive and digitize this media, as they have clearly been struggling the past three years. Also, I believe Alibaba, through its strong foundations in technology, e-commerce and mobile payments, are in an ideal place to help take these media acquisitions in new directions and provide advertisers with greater opportunity to reach new audiences in more creative and real-time ways based on the massive access to data Alibaba will have.

Search