You will be redirected back to your article in seconds

Alibaba Posts Strong Q3 Financials, Outlines M&A Strategy

Revenue climbs 54% at Chinese e-commerce and media giant, which has been exploring entertainment deals

Alibaba Group, the Chinese e-commerce and media powerhouse that’s been scoping out potential Hollywood deals, reported financial results for the third quarter of 2014 that beat Wall Street expectations in its first quarter as a publicly traded company.

Total revenue climbed 54% year over year, to $2.74 billion, which included a 1020% surge in mobile revenue to $606 million. Net income fell 39% to $494 million, which Alibaba said was primarily due to a significant increase in share-based compensation expense and amortization of intangible assets.

Alibaba, which raised $25 billion in a record IPO in September, generates most of its coin from e-commerce. But it’s also looking to use its huge cash reserves to expand entertainment interests.

Last week, Alibaba founder Jack Ma met with Sony Pictures execs to explore the possibility of co-financing movies, and the Chinese company is reportedly interested in buying a 37% stake in Lionsgate.

On a call with analysts Tuesday, Alibaba executive vice chairman Joe Tsai discussed the criteria the company uses in making decisions about investments and acquisitions.

“No. 1, we always like opportunities that will allow us to add more users, and ability to turn them into e-commerce users,” he said. The second factor is about enhancing the user experience, while the third is looking at expanding into additional product and service categories “that will enhance our position in getting the consumer’s wallet share.”

One potential takeover target: Youku Tudou, a Chinese video-streaming service in which Alibaba already owns a 16.5% stake. Last week, the companies announced a pact to drive adoption of “big data” for marketing in China.

Shares of Alibaba, listed on the New York Stock Exchange, were up 2.8% in mid-afternoon trading Tuesday, to $104.66 per share. That gives it a current market valuation of more than $256 billion.

In the third quarter, Alibaba’s China retail marketplaces had 307 million annual active buyers over the prior 12 months, versus 202 million in the 12-month period ended Sept. 30, 2013.

Popular on Variety

More Digital

  • U.K. Producer Barcroft Studios Sold to

    U.K.-Based Producer Barcroft Studios Sold to Future in $30 Million Deal

    Barcroft Studios has been bought by Future in a £23.5 million ($30.1 million) deal. The U.K.-based production outfit specializes in factual fare for channels and platforms, and its own branded channels on the likes of YouTube. Future is a U.K.-listed print and online publishing and events business. Sam Barcroft will stay on as CEO at [...]

  • Tye Sheridan

    Tye Sheridan Starring in Survival Thriller 'Wireless' From Steven Soderbergh for Quibi

    Quibi has ordered another show with notable Hollywood talent attached: scripted series “Wireless” starring Tye Sheridan with Steven Soderbergh on board as executive producer. In the made-for-mobile-screens thriller, a smartphone has a central role. Sheridan (“Ready Player One,” “X-Men: Apocalypse”) plays a self-obsessed college student who is stranded in the Colorado mountains after he crashes [...]

  • Instagram

    Instagram Testing Hidden Like Counts Globally

    Like counts will be disappearing from Instagram all over the world starting this week: The Facebook-owned photo sharing service is extending its test of hiding like counts to all of its territories, Techcrunch was first to report Thursday morning. Instagram began hiding like counts for a subset of its users in Canada this spring, and [...]

  • Ted Sarandos - Netflix

    Ted Sarandos Says Disney Plus Launch Changes 'Nothing' for Netflix

    Netflix chief content officer Ted Sarandos claims he’s not getting distracted by huge competitors — like Disney — rumbling into the company’s streaming turf. The exec was asked what has changed for Netflix with the Nov. 12 launch of Disney Plus, which the Mouse House boasted as having signed up over 10 million users so [...]

  • Game Awards OrchestraThe Game Awards, Show,

    Game Awards 2019 to Play on 53 Cinemark Screens Alongside 'Jumanji: The Next Level'

    This year’s Game Awards, recognizing the top video games, creators and esports of 2019, is coming to the silver screen. In a three-way partnership, the Game Awards, Cinemark Theatres and Sony Pictures are teaming on a superticket program pairing the Dec. 12 live simulcast of the 2019 Game Awards in 53 Cinemark locations with a [...]

  • Lilly Burns Tony Hernandez

    Jax Media Soars by Amplifying Unique Voices of Auteur TV

    Jax Media has emerged during the past few years as one of television’s busiest and buzziest production companies. The New York-based company headed by four partners — Tony Hernandez, Lilly Burns, John Skidmore and Brooke Posch — has an enviable track record of scouting new voices and executing stylish shows on a less-than-stratospheric budgets. The [...]

  • Variety Digital New Leaders

    Execs From Endeavor Audio, Group Nine Among Those Leading the Way in Digital

    Every year, Variety seeks to identify the next generation of leaders in the entertainment business, looking for representatives in the creative community, film, TV, music and digital. This year’s group has a heavy New York focus: We selected executives from forward thinking companies such as Spotify, Group Nine and Endeavor Audio, as well as writers [...]

More From Our Brands

Access exclusive content