China's Alibaba Group is buying UCWeb, one of the nation's top mobile browser companies, in a deal that will give the e-commerce giant a bigger reach with smartphone users.
It's unclear how much Alibaba is paying for the company, but it already owns a 66 percent stake in UCWeb. As part of the deal, UCWeb will become UCWeb Mobile Business Group, an Alibaba unit, and be led by its existing CEO Yu Yongfu.
In a Wednesday statement, Yu said the valuation "far exceeded" the US$1.9 billion Chinese search engine Baidu paid for two app stores last year, making the acquisition of UCWeb the largest in the country's Internet industry. Close to 3,000 workers from UCWeb will join the e-commerce company.
By making the deal, Alibaba is gaining UCWeb's massive base of worldwide users, which number over 500 million. Many of those come from China, but the browser company has been expanding in other major markets including India, Indonesia, Russia, and even the U.S.
UCWeb's core business was focused on developing mobile browsers for Android, iOS and other operating systems. But in April, it announced a joint venture with Alibaba on a new mobile search engine called Shenma. That search engine has gone on to claim over 20 percent in market share in China, UCWeb's CEO said in early May.
Lately, Alibaba has been making investments and buying up companies to cement its hold over China's rapidly growing Internet market. In April, it purchased a stake in one of China's leading video sites, Youku Tudou, and agreed to buy a leading mapping provider in the country, called AutoNavi.
Alibaba is best known for running two of China's largest online retail sites, Taobao and Tmall. But it's facing competition from rivals Tencent and Baidu, two local Internet giants that are also trying to seize control of the market with new mobile products. In March, Tencent bought a stake in a direct competitor to Alibaba called JD.com.
Under its deal with Alibaba, UCWeb will manage the e-commerce giant's businesses in mobile browser, search, location-based services, and gaming among others. Alibaba previously invested in UCWeb, starting in 2009.