Alibaba Looking at Expansion in Advertising, Media Sectors

China’s e-commerce giant, Alibaba has agreed to pay $2.23 billion for a roughly 10% stake in Focus Media. The digital advertising company which operates screens in subways and elevators across China.The move holds the potential to boost Alibaba’s core e-commerce operations. But it also extends the reach for Alibaba as a media operator, and may also signal a growing interest by Alibaba in the advertising sector. Alibaba is reported to be considering buying a stake in ad agency WPP China.The multi-layered deal Focus sees Alibaba pay $1.43 billion for a 6.6% stake in Shanghai-based Focus Media, whose shares are listed on the Shenzhen stock market. The company also will pay $505 million for a 10% stake in an entity controlled by Focus Media founder and chairman Jason Nanchun Jiang, which controls 23% of Focus Media. And, a non-consolidated, related party of Alibaba, New Retail Strategic Opportunities Fund L.P. will acquire a 1.4% interest in Focus Media. In addition, Alibaba said it plans to acquire another 5% interest in Focus Media within the next 12 months.