Alibaba Group Holding Ltd founder Jack Ma is said to be following in the footsteps of Jeff Bezos to try and revive the fortunes of print media. Bloomberg News reported earlier today that Ma is negotiating to buy a stake in Hong Kong-based South China Morning Post.
Talks are at an advanced stage, according to two people familiar with the negotiations. The deal date will be announced soon, though financial terms weren’t available, sources told Bloomberg.
Amazon.com, Inc. CEO Jeff Bezos bought the Washington Post in 2013. Among other Internet tycoons lapping up storied mastheads include Facebook co-founder, Chris Hughes, who acquired a majority stake in the New Republic magazine in 2012.
Alibaba Declines to Confirm the News
The South China Morning Post was once the world’s most profitable newspaper. But with the growth of online readership and social media, SCMP’s earnings suffered and circulation shrinked. Malaysian billionaire Robert Kuok is the current owner of the English-language broadsheet. He acquired the paper from Rupert Murdoch in 1993.
SCMP Group has recorded three successive years of profit declines. The firm has been barred from trading since February 2013 after failing to have at least 25% of its shares held by minority investors. Hong Kong securities regulation states 25% is the minimum proportion required for a company to trade its shares.
While the 112-year old newspaper is the group’s most visible asset, it also has other significant operations ranging from magazines to contract printing and recruitment.
Alibaba Group Holding Ltd and SCMP declined to comment on the news. Jack Ma, when asked, earlier this month, if he’s interested in buying the SCMP, said he’s “watching a lot of companies right now.” Bloomberg’s efforts to reach Kuok’s group were unsuccessful.
The China Daily had reported earlier this month that markets within the country were abuzz with rumors that Alibaba was in talks to buy a stake in the SCMP Group.
The Bezos Effect
Amazon.com, Inc. founder Jeff Bezos had acquired the Washington Post from the Graham family in 2013 for $250 million. Ever since, media watchers have been eager to see if Bezos manages to turnaround the struggling newspaper.
The Post received a big boost after Amazon said in September that Prime subscribers will get the newspaper for free for 6 months, and then can apply for full subscription at a reduced rate.
Amazon has around 40 million Prime users in the U.S. So what the deal essentially means is that Post will get access to 40 million potential customers.
Media analyst Ken Doctor points out that the Post has made some significant progress in readership and traffic. So much so that it’s now a serious competitor to the largest metropolitan newspaper, the NYT.
The Post “has moved up quickly in the pack of national news providers,” Doctor wrote. It “finds itself comfortably third, just behind the Times and Mail Online’s U.S. edition.”
Shares of Alibaba Group Holding Ltd closed Friday at $79.96.