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Alibaba's blurry lines should worry investors

Bareksa29 April 2014
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Alibaba's blurry lines should worry investors
Alibaba's purchase of a $1.2 billion stake in online video site - (Reuters/John Foley)

Alibaba's purchase of a $1.2 billion stake in online video site

Reuters - Alibaba's new tie-up with Youku Tudou, the Chinese video platform, is anything but a blockbuster. On the face of it, it kind of makes sense. Alibaba is the country's biggest dominant e-commerce provider. Youku has the biggest audience of mobile video watchers; 281 million of them every day. Alibaba wants to push into mobile and media, so buying an 18 percent stake makes sense. <span 1.6em;"="">However, there are two things that make this deal a flop. One is that they're paying a 20 percent -- 26 percent premium for a minority stake in Youku, and this just a couple of days after China's twitchy censors announced they were pulling four popular U.S. TV shows from the Chinese Internet. The other thing is that Jack Ma, who is Alibaba's founder, is popping up again in an unusual form. As well as Alibaba buying stakes in Youku, Jack Ma's own private equity group, Yunfeng, is also going to take a two percent stake.

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