By Gillian Wong
HONG KONG-- Alibaba Group Holding said Wednesday it has bought a
controlling stake in a Chinese Internet marketing firm in a move
aimed at expanding its advertising business.
The e-commerce giant said its investment in AdChina, an online
advertising firm, makes Alibaba a majority shareholder in the
company. Alibaba didn't disclose the size of the investment it
would take in Shanghai-based AdChina.
AdChina will work with Alibaba's online marketing technology
platform, Alimama, to develop a digital platform that provides
marketing services to businesses, online media clients and
third-party service providers, Alibaba said in a statement.
Advertising accounts for more than half of Alibaba's revenue,
according to estimates by iResearch.
Alibaba raised $25 billion in the largest initial public
offering in history when it went public on the New York Stock
Exchange in September. A major challenge the e-commerce giant faces
is finding ways to shift its lucrative advertising platform to
mobile apps from personal-computer websites.
Alibaba's advertising business involves selling search-linked
ads. Merchants selling their products on Alibaba's Taobao
marketplace, for example, would participate in auctions of search
keywords--in a similar way to spending on Google's search-linked
advertisements. It also charges for other ad spaces on its
e-commerce platforms' home pages.
In 2010, investors led by Norwest Venture Partners and including
News Corp, publisher of Dow Jones Newswires and The Wall Street
Journal, backed AdChina with $40 million.
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