Alibaba buys UCWeb for $630 million

The Chinese Internet giant has announced the imminent acquisition of UCWeb, one of the aspects of its business is the distribution of mobile games.

The Chinese IT market is currently undergoing a stage of mergers and acquisitions, which is proceeding much faster than in the West, and affects the widest possible number of sectors of the economy. It becomes impossible to separate events by topic. And the latest deal between Alibaba and UCWeb is another proof of that.

Alibaba is one of the three largest Internet companies in China (there are also Tencent and Baidu). She is engaged in the development of b2b websites, online retail, the creation of payment services, search services and cloud technologies. Only two of its portals for selling physical items over the Internet earn more than ebay and Amazon.com together.

But Alibaba's position is still relatively weak in the mobile market when compared with Tencent. The latter's applications can be found on almost every smartphone in China (all thanks to the popularity of the WeChat messenger).

In particular, in order to rectify the situation, the company has been actively engaged in acquiring successful companies in recent years. In 2013 alone, Alibaba spent $9.9 billion on acquisitions. For comparison, Tencent made purchases of $1.9 billion, Baidu – by $2.4 billion over the same period.

The acquisition of UCWeb (we recently published an interview with the company's division), the authors of the UC Browser mobile browser, within which the UC 9game mobile Android application store operates, is just one of Alibaba's steps to enter the Chinese mobile market.

And, apparently, Alibaba has high hopes for UCWeb. She estimated 34% of UCWeb, according to Reuters calculations, at an amount that is more than $630 million.

Alibaba currently owns only 66% of the developer's shares. It is reported that after the Internet giant brings its stake in UCWeb to 100%, three thousand employees will move to Alibaba. They will form the UCWeb Mobile Business Group, which will also develop mobile gaming platforms and mobile games.

What can you expect from a deal?

It seems to us that a potential rival of Tencent will appear in the next year or two, which, let's remind, earns more in games per year than any other company in the world.