Alibaba Completes SCMP Acquisition, Removes Paywall

Jack Ma, CEO Alibaba [NYSE: BABA], is known for his radical business model. However, he seems to be mirroring Jeff Bezos, CEO Amazon [NASDAQ: AMZN] , his ‘non-confrontational’ arch-rival in the global eCommerce landscape.

Alibaba has just finalised its acquisition of the South China Morning Post, SMCP. Alibaba announced last December that it will be acquiring SMCP. In a filing to the Hong Kong Stock Exchange, Alibaba said it will be acquiring the company for $266 million. Bezos, his Atlantic business rival had acquired the then ailing Washington Post for $250 million in 2013. In a news article published by Washington Post, Jack and Jeff’s acquisition has a striking similarity. Bezos’s acquisition of Washington Post marks the end of “80 years of local control of the newspaper by the Graham family”. Jack bought SMCP from Robert Kuok, a Malaysian tycoon.

Jack Ma, CEO, Alibaba. Source: cnbc.com

As the acquisition was rounded-off, the limited article paywall on SMCP has been taking away. This means Jack Ma has changed the business model of SMCP from its subscription driven to advertising. It is expected that Alibaba will use its eCommerce and digital marketing infrastructure to boost the fortune of SMCP.

SMCP is HongKong’s leading English newspaper that report sensitive issues that newspapers in mainland China sees as a taboo. The newspaper is 112-year-old, SCMP Group Ltd (0583.HK), its erstwhile owner cited challenges in traditional publishing and an ‘uncertain future’ for the industry. It is expected that Alibaba will help it “unlock greater value”.

Jeff Bezos, CEO, Amazon. Source: liberalamerica.org

Taking SMCP is Jack Ma’s third attempt at investing in a digital and media business. Alibaba had invested about in Weibo, China’s number one micro-blog. It is also eyeing a 3.5 billion investment in Youku Tudou, a video streaming site. Analysts are on the look out for Jack Ma’s strategy in integrating the newspapers’ clout and its offline and digital assets to add value to Alibaba.