Alibaba, the Yahoo-invested Chinese internet group, has launched an online advertising exchange designed to match advertisers with the nation's huge population of small and medium-sized websites and bloggers.

The move by Alibaba, which recently held an $1.5bn Hong Kong IPO of its e-commerce unit Alibaba.com, is a challenge to Nasdaq-listed Chinese internet search leader Baidu.com, which operates an advertising "website alliance". Alibaba.com’s shares rose as much as 19 per cent to HK$38.50 Tuesday