Jack Ma is nothing if not an astute businessman with a sense of drama.
Lately however, he has been telegraphing his moves in a way that has made his strategy almost predictable and anti-climactic.
Consider this: After making a howling success out of bringing suppliers and buyers together on Alibaba, Ma went into third-party payment and internet finance. After snapping up movie and television content producer Chinavision Media Group (01060.HK), he forked out US$1 billion for cable TV network operator Wasu Media.
Now comes Youku Tudou Inc. which owns China’s version of YouTube.
Ma and his partners are buying 18.5 percent of the company, the last piece in a patchwork of acquisitions that completes Ma’s vision of the future — a fully connected online business that serves up nearly everything a consumer desires.
Youku allows Ma to integrate his online video assets into his e-commerce business and open a future channel for his movies and television shows.
Alibaba and Yunfeng Capital will invest US$1.22 billion for 16.5 percent and 2 percent of Youku, respectively, according to a regulatory filing.
Ma described the deal as “an important strategic initiative that will further extend the Alibaba ecosystem and bring new products and services to Alibaba’s customers”.
That ecosystem concept is a recurring them in Ma’s numerous buying sprees.
Alibaba has been keen on the online video market as it seeks to expand from e-commerce to the cultural and entertainment industry.
Youku chairman Victor Koo said the deal will help Youku build an “immersive” cultural platform that combines online and offline entertainment.
That’s almost a sign Alibaba could be about to go full throttle into traditional movie production. Already, it has three publicly funded film projects in the works and Youku Tudou fits in quite nicely as an online distribution platform for these movies.
In addition, Youku can tap its subscriber base of young adults for fresh ideas on potential film subjects.
All this translates to user numbers, and in the internet, traffic is everything.
Website monitoring portal Alexa.com ranks Alibaba’s Taobao.com and TMall.com online shopping sites third and seventh, respectively, in China.
Youku.com is No. 18 but it’s worth paying attention to how Alibaba’s huge traffic, mostly shoppers, can be directed to Youku for their entertainment needs.
Although Youku claims to be the country’s biggest online video portal, it lags behind eighth-ranked Sohu.com (SOHU.US) which has more than 40 percent of traffic going to its video site.
With Youku on board, Alibaba can solve any content-related issues. Last month, Ma personally invested US$1.1 billion in Shenzhen-listed Wasu Media, together with Giant Interactive’s Shi Yuzhu, in exchange for a 20 percent stake.
Wasu has been working with Alibaba on research and development of smart television. Youku’s addition increases the attractiveness of Alibaba’s smart TV platform to general users, helping the e-commerce giant boost its market share in the television market.
One caveat: China’s recent crackdown on foreign online video content and internet pornography could introduce uncertainty to the equation.
It could send Chinese online viewers underground in order to stay connected to their favorite programs, shunning legitimate but censored channels.
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