Alibaba set to pay $266 million for the South China Morning Post

The deal includes the South China Morning Post (SCMP), the Sunday Morning Post, magazine and related print and digital publications, outdoor media, events and conferences and digital media businesses. Alibaba has said that it will scrap the decade-old paywall for SCMP Group news sites, thereby reaching out to more readers by providing free access to content.

There have been questions raised regarding the editorial independence of the paper, due to Alibaba founder Jack Ma’s links with the Chinese Communist Party. However Joseph Tsai, Alibaba’s executive vice chairman, says that the deal hopes to transform the organization into a “global media entity covering China for readers around the world”, thus improving China’s global image.

The SCMP Group is set to gain about HK$1.42 billion. Shares are currently suspended, as of February 2013, since it has failed to have at least the required 25% of minority investors in order to trade shares in Hong Kong.

The move comes after Alibaba has been building its media empire through the acquisitions of China Business News, setting up a media and entertainment company, CMC Holdings, and acquiring video service Youku Tudou Inc.  Jack Ma is not the first business tycoon to venture into journalism, with Jeff Bezos of Amazon having splashed out $250 million for the Washington Post in 2013. Alibaba was launched in 1999 and has since become the biggest e-commerce company in China, seeing annual revenue rise to more than $12 billion. 

The SCMP Group, with about 100,000 in print circulation, was founded 112 years ago, and holds disproportionate influence in the West due to its English-language format. Since 1993 the SCMP Group has been controlled by the family of Robert Kuok, the Malaysian tycoon, having previously been under the control of Rupert Murdoch. Print circulation has dropped, as with many print media operations, and profit growth has been minimal, however Alibaba’s investment looks to develop more digital ventures.

Photo: Charliepug

F. A. E. M.