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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.

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