Bezos' purchase of Post has parallels in China

نوشتهJames Breiner
Aug 26, 2013 در Miscellaneous

Amazon's Jeff Bezos isn't the only e-commerce billionaire making news with acquisitions. Jack Ma, chairman of China's e-commerce leader, Alibaba, has invested hundreds of millions of dollars in a Twitter-like microblogging service and a mapping service.

Both of these giants have been bolting on companies that can help them gain synergies by combining content, social networks, Internet retail, mapping (location-based selling and services), mobile platforms, devices and operating systems.

Their model and chief competitor is Google, the worldwide leader in online advertising. Google has been getting into all of these businesses. In order to compete globally, the big internet companies -- like Facebook, Amazon, Yahoo, Twitter and, in China, Alibaba and TenCent -- are seeing the need to develop all parts of online business.

The trend has implications for content providers, such as news organizations, and ultimately for freedom of expression. First, though, the business trends.

Mobile is the next battleground

Alibaba and its peers are seeing an opportunity in mobile. Alibaba already has some 700 million users of its online auction and retail services, but with the investment in Weibo and commitment to advertise on that social network, it becomes more mobile and more social, according to Wall Street Journal reporter Tom Orlik.

Alibaba's main reason for paying $586 million for an 18 percent stake in Weibo is to provide a mobile platform for its retail offerings, according to an analysis by The Street. Weibo has 50 million active daily users. They give Alibaba a tool to face off a challenge to its retail dominance from another Chinese Internet giant, TenCent, which has 300 million users of a mobile instant messaging service called WeChat.

Mobile is becoming the new battleground of the Internet, not just in China, but globally. Facebook reported revenue growth of 53 percent in its most recent quarter, driven by its aggressive focus on advertising on mobile devices. Analysts quoted by Bloomberg saw huge growth potential for the company in mobile advertising.

Location tied to retail

Another aspect of Internet competition is linking mobile devices to location services and internet purchasing. Increasingly, users of mobile devices are using location services to make choices about shopping at brick-and-mortar locations. Or they combine social, mobile and location services to find nearby friends and meet at restaurants or entertainment venues.

Alibaba recently strengthened its position in location services by acquiring a 28 percent stake in AutoNavi Holdings for $294 million, which will allow it to link the location service to its retail offerings. The Wall Street Journal offered this analysis of the deal:

"The two companies will also cooperate and combine their data to develop e-commerce products that make use of the actual location of smartphone users. The tie-up is another step in Alibaba’s efforts to gather control over services offered on smartphones. It will likely present a challenge to rival Tencent Holdings Ltd., which analysts have said is likely to make use of its popular messaging application, WeChat, to earn revenue off of marketing and e-commerce also based on the users’ physical location."

We are seeing a dizzying race to consolidate Internet dominance by a handful of giants -- Google, Amazon, Twitter, Facebook, Alibaba, TenCent and others -- who are acquiring companies that will help them in their quest. Facebook's purchase of Instagram in 2012 for $1 billion is a major example of the trend.

This post is an excerpt from a post on News Entrepreneurs. It is published on IJNet with permission. Read the complete post here.

James Breiner is a consultant in online journalism and leadership. He is a former co-director of the Global Business Journalism Program at Tsinghua University and a former Knight International Journalism Fellow who launched and directed the Center for Digital Journalism at the University of Guadalajara. He is bilingual in Spanish and English. You can follow him on Twitter here.

Image CC-licensed on Flickr via World Economic Forum.