E-commerce giant Alibaba buys leading HK newspaper
Print Edition
CHINESE e-commerce giant Alibaba says it is buying Hong Kong’s leading English-language newspaper, the South China Morning Post.
Alibaba Group announced late yesterday that it had signed a deal with publisher SCMP Group to buy the Post and the company’s other media assets, which include magazines, outdoor advertising and digital media.
The newspaper said in a story on its website that the purchase price was not being disclosed.
The acquisition is the the latest media-related purchase by Alibaba and gives control of the Hong Kong publication to a Chinese mainland company.
In October, Alibaba bought all the shares in video streaming site Youku Tudou that it didn’t already own for US$3.6 billion. Earlier this year, it invested about US$200 million for a stake in Shanghai Media Group’s financial information company China Business News. It also has a stake in Sina Weibo, which runs a microblog service.
The acquisitions are part of Alibaba’s strategy of diversifying from its core Internet shopping business by tapping the rising demand for online content by Chinese consumers.
The 112-year-old Post was once reputed to be the world’s most profitable newspaper on a per-reader basis although its fortunes have suffered in line with the wider decline in the traditional newsprint industry as readers shift to online news sites.
“Why is Alibaba buying into traditional media, considered by some a sunset industry? The simple answer is that we don’t see it that way,” Alibaba Executive Vice Chairman Joe Tsai said in a statement. He said the deal would combine Alibaba’s technology with the SCMP’s journalistic heritage “to create a vision of news for the digital age.”
The newspaper’s magazine division has a license to publish Chinese-language editions of Cosmopolitan and Harper’s Bazaar. It also has a stake in the Bangkok Post newspaper. It took its first step into e-commerce in October by buying a majority stake in fashion site MyDress.com.
The newspaper’s current owner, Malaysian sugar tycoon Robert Kuok, bought it through his Kerry Group from Rupert Murdoch in 1993.
SCMP Group’s net profit has declined for the past four years, falling last year to HK$137 million (US$17.7 million) on HK$1.2 billion in revenue, according to its latest annual report. Its stock has been suspended from trading on Hong Kong’s stock market since February 2013, when the number of shares freely traded by the public fell below the exchange’s minimum requirement.
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