This is a just a rumor for now. But the source of the rumor is of high quality. Sometimes, those rumors can affect the price of stock a great deal.
My last post is part 8 of China's Mobile Instant Messaging War. It can be found here:
But that largely involves Netease and Tencent.
My last post on Sina related can be found here:
The source of the rumor comes from a very prestigious financial daily newspaper in China. The story can be found here (in Chinese):
Summary of the artice:
- Secret negotiation for Alibaba to invest in Sina's Video Channel had started.
- Negotiation are between the highest level of both companies (CEOs of both Alibaba and Sina).
- Alibaba had recruited the guy who is in charge of the video channel in Tencent.
If this becomes true, it would be good for both companies. For Alibaba, they are an E-commerce company. They don't have the infra-structure to run a internet/mobile video company. It is a great way to expand to this high growth area. Since they already own a big part of Weibo, as they gobble up more part of Sina, and the ownership of Sina is very spread out, they could eventual won Sina (by stealth).
But the biggest winner is Sina. All of Sina's cash is devoted to portal and Weibo. They have no money to invest in video.
As the biggest portal in China, it is such as waste. As the biggest portal as well as company great in entertainment, they shall be a major player in the area of internet/mobile video. Except all their money is tied up in Weibo and portal.
Now, if this rumor becomes true, Sina will have the cash to invest in the video area. They could become a contender this area.
The loser is of course Sohu and Yoku.