SHANGHAI, April 30 (UPI) -- China's e-commerce giant Alibaba has acquired an 18 percent stake in Sina Weibo, the country's major micro blogging service, for $586 million, Sina Corp. said.
Sina, on its website, said the deal will allow the companies to explore social commerce and develop innovative marketing solutions "to enable merchants on Alibaba e-commerce platforms to better connect and build relationships with Weibo users."
Sina said it has granted an option to enable Alibaba to increase its ownership in Weibo to 30 percent on a fully diluted basis at a mutually agreed valuation in the future.
The companies will cooperate in user account connectivity, data exchange, online payment and online marketing and will explore new business models for social commerce based on the interactions of the hundreds of millions of users on Weibo and on Alibaba's e-commerce platforms, the announcement said.
Sina said the strategic alliance is expected to generate about $380 million in advertising and social commerce services revenues for Weibo over three years.
"We believe that this strategic alliance helps to create a stronger Weibo," Alibaba Chairman Jack Ma said, adding: "We believe that the cooperation of our two robust platforms will bring unique and valuable services to Weibo users, as well as making the mobile Internet a core part of Alibaba's strategy."
Weibo has more than 500 million users in China.