E-commerce company Alibaba buys 18 per cent stake in Sina's Twitter-like service for $586M

NEW YORK, N.Y. – Alibaba Group, China’s largest e-commerce company, has agreed to buy an 18 per cent stake in Sina Corp.’s Weibo, the microblogging platform.

Alibaba, which is partly owned by Yahoo Inc., says it has paid $586 million for the stake in China’s equivalent of Twitter. It has the option of increasing its ownership to 30 per cent.

Sina’s U.S.-listed shares jumped $6.69, or 13 per cent, to $56.99 in morning trading. The day’s high of $60.81 was the stock’s highest level since October.

The companies also agreed to develop ways to let merchants on Alibaba connect with Weibo users. It expects the alliance to generate $380 million in advertising and commerce services for Weibo over the next three years.

Yahoo owns 24 per cent of Alibaba. Yahoo shares fell 1 cent to $24.67.