This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Has Alibaba Lost Itself in Cyberspace with Odd Business Ventures?

BEIJING (TheStreet) --"Alibaba wants to rule China" was one reader's quip posted Wednesday on a Chinese news portal under a story about the company's latest business: vegetable and fruit e-farming.

The comment highlighted Alibaba's powerful and ongoing push into a wide range of new businesses, including many that have little or nothing to do with its core services as China's leading platform for wholesale, business-to-business and retail e-commerce.

In the past year the company, which is planning a New York Stock Exchange initial public offering that could raise a record $20 billion next month, has expanded into wealth management products, film and TV production, software, used-car sales, logistics and now an e-farming initiative that links online clients with farmers who grow their food.

Until last week, Alibaba also ran a credit service for small enterprises. It sold the service to its online payment affiliate Alipay for $518 million.

Alibaba's main business is a virtual marketplace, encompassing the successful Web sites Taobao and Tmall, that posted more than $248 billion in sales last year.

How the company's recent string of startups, acquisitions and spinoffs will affect this year's financials won't be clear until months from now, long after the anticipated IPO. So unless they're careful, investors studying Alibaba's prospectus with a view to buying stock could easily overlook some of the company's latest business moves.

For example, there's nothing in the prospectus about the e-farming initiative reported by state media Wednesday. It started in March as China's "first Internet customization for private farms," the report said. "Users who simply click a mouse buy a piece of land and become a 'landlord' who gets fruit and vegetables from the land every month."

The crops are raised by rural cooperatives in Anhui Province that "employ professional farmers to care for the plants, harvest the ripe crops and ship" the food to online clients. What kinds of food and how much is grown depends on the investment of the client, who is welcome to visit the farm anytime.

Other recent Alibaba ventures include:

-- The purchase of the Chinese browser, online game and app developer UCWeb. Terms were not disclosed, but state media said Alibaba's payment was more than the $1.9 billion paid by Chinese search giant Baidu (BIDU) for an app developer last year. UCWeb's 3,000 staffers are now Alibaba employees.

-- Forming a nationwide alliance of 3,900 logistics services, mainly small courier services that deliver packages. The alliance is expected to streamline deliveries of products bought through Alibaba's retail and commercial platforms.

-- Teaming up for online sales of used cars with China Grand Auto, a company that sold more than a half-million cars last year and reported revenues of $13 billion. The online service bills itself as a way to buy at a discount by eliminating the need for a car lot salesman.

-- The $800 million takeover of a TV and film production company ChinaVision Media. Alibaba said last week it recently detected financial irregularities while examining the company's books.

At the time of publication, the author held no positions in any of the stocks mentioned.

¿This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.02 -2.67%
FB $104.07 -5.81%
GOOG $683.57 -3.45%
TSLA $162.60 -7.26%
YHOO $27.97 -4.05%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs