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Alibaba challenges Baidu/Qihoo with UCWeb; Q1 results reportedly on tap

  • Acquisition-hungry Alibaba (ABABA) is buying the 1/3 of top Chinese mobile browser vendor UCWeb it doesn't yet own for a mixture of cash and stock. The price hasn't been disclosed, but Alibaba claims the deal is the biggest Chinese Web merger in history, exceeding Baidu's (BIDU +0.4%) $1.9B purchase of app store provider 91 Wireless.
  • UCWeb has a 50%+ share of the Chinese mobile browser market, and also has 35% of the Indian market. The company claims 500M total browser users, as well as 50M users for its Android app store, which competes against Baidu and Qihoo's (QIHU +3.8%) popular stores.
  • More importantly for Baidu (and also relevant for Qihoo), UCWeb claims a 20%+ share of the Chinese mobile search market on the back of 100M active users. A mobile search JV was launched with Alibaba in April.
  • Meanwhile, CNBC reports Alibaba will likely file a new F-1 early next week that includes its Q1 results. Odds are Yahoo (YHOO +0.6%), which has been reporting Alibaba's results a quarter in arrears, will move on the numbers.
  • CNBC adds Alibaba is still expected to go public in the first week of August. Bloomberg previously reported Alibaba is eying an Aug. 8 IPO.
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Comments (10)
  • Pete P.
    , contributor
    Comments (841) | Send Message
     
    I downloaded the UC browser and like it a lot. Looks like a great investment for Alibaba. IMHO
    11 Jun 2014, 02:47 PM Reply Like
  • James Sands
    , contributor
    Comments (2433) | Send Message
     
    And Alibaba is now investing in anything tech, what is their vision again and why should Amazon and eBay be threatened. Looks like they are aggressively spending their IPO proceeds.....what a hodgepodge this company is becoming. Frenetic pace of added growth by acquisition if you ask me.
    11 Jun 2014, 03:22 PM Reply Like
  • Pete P.
    , contributor
    Comments (841) | Send Message
     
    Well, it seems mobile is the future growth area. UC browser is terrific and has hundreds of millions of mobile users. Seems to make a lot of sense.

     

    It seems that Ali is investing in areas they believe have very large growth opportunities, and potentially high margins.

     

    This is all my opinion. I'm very positive on Ali and Yahoo, but can certainly understand that others might be negative. To each his own. I've seen Yahoo's improvements and I think I see its potential. I guess we'll all see soon.

     

    Looking forward to Yahoo's shareholder meeting and earnings next month.
    12 Jun 2014, 09:37 AM Reply Like
  • James Sands
    , contributor
    Comments (2433) | Send Message
     
    I am not negative on Alibaba's e-commerce potential at all. But I do question their leverage and spending as they still have a publicly announced $16 billion investment plan through 2020 (which directly relates to their core business). If Alibaba spreads their resources too thin and they don't pan out, it is wasted money for investors. I don't mind seeing direct e-commerce investments, but I'm not so sure about the recent slew of investments. Youku has burned them so far and that was over $1 billion.

     

    I have no position or stance on Yahoo. I have researched the company's financial trends many times and without digging into too much detail, I find that Yahoo's investments are worth more than their core declining ad business. I think Yahoo would be better served aggressively attacking Twitter's model as Twitter is still in early stages of development (maybe they will).

     

    I know comments directed towards Alibaba will get Yahoo shareholders responsive, but again I have no insinuations towards impacts to Yahoo based on my thoughts for Alibaba.
    12 Jun 2014, 10:18 AM Reply Like
  • Pete P.
    , contributor
    Comments (841) | Send Message
     
    Yahoo needs to show that their core declining ad business is not declining at all. I think that have already shown the trend is now positive, but it needs to keep going higher.
    13 Jun 2014, 09:28 AM Reply Like
  • James Sands
    , contributor
    Comments (2433) | Send Message
     
    Agreed, more improvement is needed.
    14 Jun 2014, 11:01 AM Reply Like
  • Guy in Ithaca
    , contributor
    Comments (428) | Send Message
     
    UC likely a smart move. Also, YHOO will likely move up next week.
    11 Jun 2014, 03:56 PM Reply Like
  • James Sands
    , contributor
    Comments (2433) | Send Message
     
    No ill-will for those owning Yahoo shares. Best of luck!
    11 Jun 2014, 04:06 PM Reply Like
  • efuji
    , contributor
    Comments (19) | Send Message
     
    Alibaba should buy YHOO. A pure stock deal would be a steal if it took 30% of the entire Alibaba float since they would be acquiring the 22% share of Aibaba that is currently owned by YHOO plus the major stake in Yahoo-Japan. The rest of Yahoo would be basically free including the Yahoo Search business (as small as it is). Combining Yahoo Search in the US and the other search functions in China (and Japan?) could be interesting since Google is effectively barred from China. Any downside to this possibility?
    11 Jun 2014, 06:58 PM Reply Like
  • Pete P.
    , contributor
    Comments (841) | Send Message
     
    I agree efuji. It would make a lot of sense for Ali to acquire Yahoo. Let's see what happens.
    12 Jun 2014, 09:38 AM Reply Like
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