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Alibaba investing in US messaging startup Tango [China Daily: Hong Kong Edition](China Daily: Hong Kong Edition Via Acquire Media NewsEdge) After a series of buying up and investment in its home market, Alibaba Group Holding Ltd, a Chinese e-commerce conglomerate, made its move in the United States by sinking $215 million in the California-based chat application Tango. Together with some of Tango's prior investors, Alibaba has led a $280 million investment round in the free mobile messaging service, according to a blog written by the startup's chief executive officer Uri Raz and chief technology officer Eric Setton on Thursday. The two senior executives, who are also founders of the 4-year-old Tango, said they are very excited to continue to build upon their foundation of free communications, while extending into new growth areas in social networking and content. "We know that we can't do it on our own, and, for that reason, we couldn't be more excited to announce our newest investor, Alibaba Group," they said. It was reported by The Wall Street Journal that Alibaba's investment in a minority stake of Tango valued the company at about $1 billion. The public relations office of Alibaba confirmed the investment on Thursday but refused to comment further on the deal. The investment makes mobile messaging applications the hottest asset in the tech world. Facebook Inc acquired WhatsApp, a popular mobile messaging application, for $19 billion in February. Despite the fact that Tango has no business in China, the company does have 200 million registered users spread across the US, Europe, the Middle East and Asia. Analysts said the move will not only help Alibaba pave its way to an upcoming and possibly the largest initial public offering in the US but also boost the company's strength in mobile. Zhuo Saijun, an analyst with the Beijing-based Internet consultancy Analysys International, said with the investment in Tango, Alibaba will be able to tell a better story to investors. "Because Tencent's WeChat enjoys a dominant position among mobile chatting apps in China, Alibaba desperately needs to find a strong target to fill its gap in this area," Zhuo said. There is no product that is as strong as WeChat, which has 600 million registered users in China, so Alibaba has to look for candidates in markets outside China, he added. "There is the possibility that Alibaba will introduce Tango to the Chinese market or bring in the company's technology or patent into China," Zhuo said. Jane Zhang, principal research analyst with Gartner Inc, a US information technology research and advisory firm, echoed the view, saying Tango is not only a messaging app but also a content platform with video, social and gaming, which could bring business expertise to the operation of Laiwang, Alibaba's own mobile messaging app. Despite some cash-burning promotions, Laiwang, which was launched last year by Alibaba as a weapon to compete with Tencent's WeChat, has so far failed to turn many heads. The app, which has more than 10 million users, lags far behind WeChat. Apart from its unfulfilled ambitions regarding mobile chatting, the investment in Tango could potentially help with the expansion of Alibaba's overseas online commerce business. Annie Xu, US general manager for Alibaba, told the Financial Times the group was exploring how it could expand its cross-border work. While Alibaba's core business remains in China for the foreseeable future, she said, it is also looking at ways it can use its access to Chinese customers and wholesalers to facilitate more commerce. No concrete plans have been revealed, but the senior executives of Tango confirmed that as part of this financing, Michael Zeisser, who heads Alibaba's investment team in the US to expand the company's global footprint, will join Tango's board of directors. (China Daily 03/21/2014 page16) (c) 2014 China Daily Information Company. All Rights Reserved. Provided by Syndigate.info, an Albawaba.com company |