China's Alibaba offering to buy mapping service for $1.1 billion

Alibaba wants to buy the remaining stake in AutoNavi

Chinese e-commerce giant Alibaba Group is offering to pay US$1.1 billion to buy one of the country's largest mapping providers, as part of its strategy to boost its mobile services.

On Monday, the company offered to buy the remaining shares in AutoNavi. Last May, it had acquired a 28 percent stake in the mapping provider for $294 million, as part of collaborative deal to share data between the companies.

Alibaba runs two of China's largest retail sites - Tmall.com and Taobao.com, but the e-commerce giant also has interests in search, cloud computing services and mobile phone software.

By buying the rest of AutoNavi, Alibaba would be tapping into another major way to funnel users to its e-commerce services. This year, about 47 million Chinese users are expected to use mobile mapping services each day, according to Beijing-based research firm Analysys International. By 2016, that number will reach 112 million users.

In a letter to AutoNavi, Alibaba said it would be better for the mapping provider to join forces with the e-commerce giant, rather than go it alone. "Several larger, well-capitalized" rivals are becoming major competitors in mapping, Alibaba added, without naming the rivals.

One such company rising in the maps market is Baidu, China's largest search engine, which is investing in developing its mobile services. Tencent is another Chinese Internet giant also with its own dedicated online mapping service.

Both Baidu and Tencent have tried to rival Alibaba in e-commerce. By further developing their mapping software, the companies could run services that conveniently direct users to stores and merchants within their vicinity, and also highlight nearby deals on products.

AutoNavi said on Monday it is forming a committee to consider Alibaba's offer. In addition to offering its own mobile mapping app, AutoNavi also licenses out its navigation data to many partners. Some of them are car makers including BMW, Toyota and Honda. But the company has also worked with Chinese Internet sites and mobile handset makers Apple and Samsung to power their mapping services.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags Internet-based applications and servicesconsumer electronicse-commerceAlibaba GroupMapssmartphonesinternet

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Michael Kan

IDG News Service
Show Comments

Essentials

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?