Alibaba, the e-commerce giant led by former English teacher Jack Ma, continued its acquisition spree on Wednesday by snapping up the rest of mobile internet browser UCWeb for an undisclosed price.
An Alibaba spokeswoman declined to comment on the size of the deal after various reports indicated that its valuation of UCWeb had surpassed the $1.9 billion that Baidu paid for 91 Wireless last year.
Alibaba already held a 66% stake in UCWeb through convertible preferred shares and is set to pay for the remainder of UCWeb with a mix of cash and Alibaba stock. Alibaba is planning later this year to raise as much as $15 billion through an initial public offering of shares in New York.
By buying UCWeb outright, the e-commerce giant is in a better position to generate more money from mobile shoppers at a time when buyers and sellers are increasingly turning to their smartphones and other mobile devices to make transactions, according to some analysts.
“The acquisition of UCWeb helps Alibaba improve its monetisation from mobile traffic,” Ricky Lai, a Hong Kong-based analyst at Guotai Junan, said. “They can introduce their e-commerce business to UCWeb and boost their advertising revenue through the company.”
UCWeb was founded in 2004 and its flagship product UC Browser, has more than 500 million quarterly active users worldwide. It was one of the top five mobile apps in China with a market share of more than 65.9%, according to Beijing based market researcher iResearch.
The company also owns gaming platform UC 9Game and PP Mobile Assistant, a mobile apps distribution channel in China, and in April linked up Alibaba to launch a mobile search device called Shenma.
Big outside China
UCWeb has an overseas user base with a market share in 10 countries outside of China. It is the largest mobile browser in India with more than a 30% market share, according to web traffic monitor service counter StatCounter.
The deal adds to the string of acquisitions Alibaba has racked up in the past six months as it prepares for its IPO. This includes buying stakes in Singapore's postal service SingPost and, in an eclectic choice, a 50% stake in Guangzhou Evergrande, one of China’s top football clubs.
According to Dealogic data, Alibaba has announced $5.1 billion worth of acquisitions year-to-date, with a total of 12 deals.
Its two largest deals this year have been a $1.1 billion offer to buy a 71.1% stake in Chinese digital mapping and navigation company AutoNavi and a $1.2 billion offer to buy an 18.5% stake in online video operator Youku Tudou.